STRATEGIC

32 Strategic Choices for a Turbulent World: In Pursuit of Security and Opportunity
Figure 2.6
Debt as a Percentage of GDP
110
105
103
Debt of GDP (percentage)
100
95
90
85
80
75
74
80
70
2015 2027 2040
Year
SOURCE: Howard J. Shatz, U.S. International Economic Strategy in a Turbulent World,
Santa Monica, Calif.: RAND Corporation, RR-1521-RC, 2016, Figure 2.10, updated with
data from CBO, Long-Term Implications of the 2016 Future Years Defense Program,
Washington, D.C., CBO 51050, January 14, 2016, pp. 14–15.
NOTE: When will servicing debt crimp U.S. policy options? CBO estimates that in
2040, interest payments could absorb more than 20 percent of all federal revenue,
gobbling up funds that could be invested in domestic advances and international
efforts.
RAND RR1631-2.6
for the first time in its history, would default on its debt. In 2011, Standard
and Poor’s downgraded the U.S. credit rating from AAA to AA+,
where it remains, despite an improving economy, because of high U.S.
debt levels. If the United States remains on its current course, CBO
estimates that entitlement spending could amount to 73.2 percent of
GDP by 2040, while interest on the debt could be 4.3 percent—an
unsustainable path. 33
A fourth source of American self-doubt involves the conduct of
modern warfare and its effects on local populations and humanitarian
norms. While both wars brought quick, promising results—recall the
33 Keith Hall, The 2015 Long-Term Budget Outlook, Washington, D.C.: Congressional
Budget Office, June 16, 2015.