On March 18, America's national debt crossed $39 trillion, and the Congressional Budget Office projects it will exceed 100% of GDP later this year, climbing to 120% by 2036. But economist John R. Dearie offers a way out: reignite economic growth to the 3.5% average the U.S. maintained for 54 years after World War II.
From 1947 to 2000, the U.S. economy grew at an annual average of 3.5%. Since 2005, it has hit 3% or better only twice—in 2018 (3.0%) and 2021 (6.2% as COVID rebounded). Over the last two decades, real GDP growth has averaged just 2%. The first quarter of this year was revised down to 1.6%.
That gap matters enormously. Over 25 years, 3.5% growth instead of 2% would yield an additional $185 trillion in real GDP. Since the federal government has consistently collected about 17% of GDP in tax revenue since WWII, that translates to $32 trillion in extra revenue—82% of today's $39 trillion debt. If the U.S. had grown at 3.5% since 2005, Dearie calculates, the debt would now be $20–22 trillion, 45% less, thanks to $12.5 trillion in extra tax receipts and $5 trillion in interest savings.
“America doesn't just have a spending problem—it has an economic growth problem,” Dearie writes. He notes that the economy grew at 4.3% annually from 1995 to 2000, proving sustained high growth is possible.
Where Growth Comes From
Dearie points to Nobel laureate Robert Solow's work showing that most growth comes from productivity gains driven by innovation. And innovation, especially transformative breakthroughs, comes disproportionately from entrepreneurs. From the steam engine to AI, entrepreneurs have driven every major shift.
Three ingredients fuel entrepreneurship: ideas, funding, and skilled talent. Dearie proposes three concrete steps. First, fully fund the CHIPS and Science Act, a bipartisan measure signed in 2022 that authorizes billions for AI, quantum computing, clean energy, and semiconductor manufacturing. Only a fraction has been appropriated so far. A related development is TSMC's additional $100 billion commitment to U.S. chip plants, highlighting the urgency of securing domestic supply chains.
Second, pass the INVEST Act, a package of 22 bills that passed the House 302–123 in December 2025, aimed at expanding capital access for startups and small businesses. Third, enact high-skilled immigration reform to attract global talent. While border security is essential, the U.S. needs the world's best innovators. A proposed national interest legalization program could prioritize such skilled immigrants over blanket amnesty.
Dearie's argument is gaining traction as policymakers grapple with the debt trajectory. Without faster growth, he warns, the fiscal hole will only deepen. With it, the U.S. can avoid debt-driven oblivion and instead fuel a new era of prosperity.
