While warnings about public debt levels may feel like background noise, real estate investors can no longer afford to tune them out. Federal debt held by the public now stands at 100 percent of Gross Domestic Product (GDP). The last time it reached this level, the country had just finished financing World War II. The Congressional Budget Office forecasts it will surpass that historical peak by 2029 and continue rising thereafter.
The consequences are already materializing. Spending on interest payments on public debt surpassed $1 trillion for the first time in fiscal year 2025, accounting for 3.2 percent of GDP. Interest costs now threaten to crowd out other spending, and we are approaching the point where governments must issue new debt merely to service existing obligations.
Policymakers will be compelled to act. Most economists agree that very high debt levels coincide with slower growth and increased economic fragility. Few prominent voices in economics or finance
