Last week, the presidential nominees met for their first, and likely their only campaign debate. Candidates Harris and Trump were asked about a wide array of topics from the border and the conflicts in Ukraine and Gaza, to abortion and IVF accessibility. The one topic that received zero airtime happens to be the most pressing issue facing our nation today: the national debt.
There is a laundry list of reasons why Americans should fear the debt crisis — a near-guaranteed parade of horribles — starting with the possibility of Treasury devaluing the debt away and the high interest rates that would accompany the latter, and ending with severe market volatility and our potential decline on the world stage if countries like China use our financial precarity against us. But we remain foolishly unperturbed. No one on the presidential campaign trail has bothered to touch the topic, let alone propose reform.
The silence is all the more perplexing given the massive public response to much lower debt levels in the 1980s. During the Reagan era, the national debt was a major political issue, with both politicians and the public voicing concerns over the growing deficit and pushing for real policy solutions. Today, the debt exceeds $35 trillion, and interest payments are poised to overtake defense spending as the largest government expenditure. Nevertheless, officials on the left refute warnings of economic disaster as speculative, and their counterparts on the right are utterly unwilling to compromise to cut spending.
Washington’s failure to act is symptomatic of a much graver problem than political gamesmanship. Americans no longer feel individual responsibility for the national purse and are too financially intertwined with the federal government to push for policy change. We have traded in authority over our leaders in exchange for entitlements — the very programs that contribute to the nation’s financial hole. If we hope to avoid an economic catastrophe, lawmakers need to course correct now. But more than immediate spending cuts, we need to revitalize a vision of government that is managed by a scrupulous people who hold their government accountable.
David Hume fortuitously wrote in “Of Public Credit” that “either the nation must destroy public credit, or public credit will destroy the nation.” His key insight was debt’s utility as a political tool; it “enables [a politician] to make a great figure during his administration, without overburdening the people with taxes, or exciting any immediate clamors against himself.” Both Presidents Biden and Trump are guilty of abdicating their duty to lower the deficit for political gain, but who can blame them? We certainly don’t.
Hume learned of debt’s dangers from those who came before him. Runaway debt has long presaged the end of empire. For the Romans, unbridled spending on the army and imperial bureaucracy drove up the debt, debased the currency, and eventually led to the fall of the empire itself. The French Revolution was driven, in no small part, by a fiscal crisis caused by — you guessed it — unsustainable debt. Similar stories of debt crises can be found in Spain, China, Great Britain, and other great powers.
The potential for a debt-driven financial crisis poses grave risks, not just to our economic well-being, but to our social and political stability. Prolonged economic turmoil can erode trust in government, fuel social unrest, and threaten the foundations of our democratic system. We must reverse the modern view of government that has shifted from something to be managed for our benefit to something that manages us.
The shift makes sense. 22.1 million citizens work directly for the government and many more work indirectly through pervasive federal contracting. Those not directly employed by the government are guaranteed to fall under its regulatory ambit or welfare programs in some way shape or form. Hume could never have imagined a citizenry so financially married to the government that it cannot hold those in power accountable when they fail to act in the public’s best interest.
At a minimum, we need to cut spending, and to cut spending, we need to cut entitlement programs. Medicare and Social Security are the largest government programs, costing the U.S. $2.9 trillion in 2023 alone. For perspective, this is almost twice Congress’s discretionary budget to run the rest of the federal government. But no politician will make the unpopular decision to cut spending, particularly entitlement programs, unless there is pressure from the public — or at the very least, from the commentariat.
The public’s failure to react to the debt crisis betrays our own misperception of who will pay for it in the end. Here’s a clue: it won’t be decision-making officials. It’s time for Americans to demand fiscal discipline from our political leaders, or pay the price.