The national debt fix would cost $827 billion—roughly what America spends on its entire military, economists warn

The U.S. would need to cut spending or raise taxes by $827 billion, roughly what it spends on defense, just to keep the national debt burden from doubling by 2054, according to a new report. A report published Wednesday from think tank Cato Institute finds that to maintain the 98% debt-to-GDP ratio figure that the U.S. hit in 2024, the U.S. would have to enact spending cuts or increase taxes equal to 2.87% of GDP, or about $827 billion. That’s close to the U.S.’s defense budget requests, which totaled $892 billion for fiscal year 2026, and $850 billion in fiscal year 2025. The $39 trillion national debt is only expected to balloon even further. Last year, President Donald Trump raised the debt limit by about $5 trillion by signing the One Big Beautiful Bill Act (OBBBA). The bill also cut social spending as well, including on Medicaid and food stamps, but the U.S. is still expected to run a $1.9 trillion budget deficit. Now, the problem is multiplying as interest paid on the national debt is expected to hit $1 trillion this year, surpassing military spending and bringing the country dangerously close to entering a “debt spiral” as interest paid on the national debt is predicted to grow faster than GDP in five years. Higher debt and interest rates have worsened the country’s budget outlook. Because of that, Moody’s last year downgraded the credit rating of U.S. long-term debt. How the debt compares to defense spending Of course, the debt-to-GDP ratio in 2024 was lower than its 106% post-WWII peak, when military spending hit a record-high percentage of government spending. But William G. Gale, a senior fellow at the Brookings Institution and a co-author of the report, said there’s one lever the government pulled then that’s just not available today. “What we did over the next 40, 50 years was cut defense spending from something like 9% of GDP,” he told Fortune. While defense spending has steadily increased over the past few years, it made up just 3.4% of total GD