The US national debt is climbing to record levels. In September 2025, the famous National Debt Clock in New York stood at over 37.4 trillion dollars. That amounts to around 120 per cent of the US gross domestic product (GDP). According to Professor Emeritus of Monetary Economics Casper de Vries (Erasmus School of Economics), the United States is on a dangerous trajectory.
Despite these alarming figures, the US can still afford to take on massive debts. Europe, by contrast, is bound by stricter agreements such as the Stability and Growth Pact. Yet debts are also mounting rapidly here. In an interview for the Dutch journalistic platform NEMO Kennislink, De Vries warns: ‘In the long run, a domino effect may occur: higher debts lead to higher interest rates, forcing countries to borrow even more and eventually pushing them into recession.’
The real time bomb for Europe is ageing
Projections from the US Congressional Budget Office indicate that national debt could rise to 166 per cent of GDP by 2054. Compared with the US, the Netherlands is in better shape: in 2024, Dutch public debt stood at just 43 per cent of GDP. But the European average is much higher, around 89 per cent – well above the agreed threshold of 60 per cent. ‘There are shockingly few countries that comply with this norm,’ De Vries observes. ‘France, for instance, has never adhered to it.’
According to De Vries, the real ticking time bomb for Europe is demographic ageing. In countries where pensions are financed largely from government budgets, debts are projected to rise explosively over the coming decades. Forecasts by the Netherlands Scientific Council for Government Policy (WRR) show that by 2070 Italy’s national debt could exceed 250 per cent of GDP, while Spain and France could reach around 200 per cent. ‘Such debt ratios will eventually trigger a financial crisis,’ De Vries cautioned.
‘Unpopular choices are unavoidable’
De Vries advocates tough but necessary measures: cutting government spending, saving more for pensions, and raising the retirement age. Only in this way can Europe safeguard its financial stability and remain competitive with the United States. ‘If Europe wants to take on the US in the long term, we will first have to make hard choices in the short term.’
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Click here to read the full interview on the NEMO Kennislink website (In Dutch). For more information, please contact Ronald de Groot, Media & Public Relations Officer at Erasmus School of Economics: rdegroot@ese.eur.nl, mobile: +31 6 53 641 846.
