Researchers put a number on how much debt US can carry
The United States has about 20 years to change course on its national debt before it reaches the estimated limits of its debt capacity, according to new research from the Penn Wharton Budget Model. Researchers estimate the outer limit of U.S. debt capacity at about 210% of gross domestic product. At that point, even a 100% tax on labor income would not generate enough revenue to cover interest costs, making the debt impossible to stabilize through labor-tax increases alone. Waiting until that threshold is reached would carry a steep cost. According to the model, stabilizing the debt at ...