$35 trillion. That is $35,000,000,000,000 and change. That is 35 followed by twelve more figures. That's $35 trillion with a "T" followed by a "rillion." No matter what plane of existence you occupy, that's a lot of money. And forget the Democrat's "tax the rich" talking point; were we to confiscate every penny in wealth and holdings from every billionaire in the nation, it would fund the federal government for nine months. What then? Democrats, after all, have become strangely quiet about millionaires, especially when politicians seem to attain this status themselves so easily — even one like Bernie Sanders, the daffy old Bolshevik from Vermont, who has never done an honest day's work in his life.
That's how much the United States of America owes its many and varied creditors. That's unsustainable. That's unforgivable, that we have amassed this kind of debt. And for what?
And the worst thing about it is that we could have seen it coming from miles away.
The U.S. is headed for "the most predictable economic crisis in history," as Bill Clinton's former White House chief of staff once put it. Why? Because of the mountain of federal debt that we keep making bigger and bigger.
For the first time since the wartime economy of the late 1940s, U.S. debt is roughly equal to the value of all the goods and services our economy produces in a year. When World War II ended, all that spending on tanks and aircraft came to a quick end. But the major drivers of today's debt crisis are Medicare and Social Security, and their price tags are set to keep rising.
The national debt, right now, is like a dead woodchuck under the porch. We can all smell it, we all know it's there, and a lot of us are just hoping that if we hold our noses and ignore it for a while, it will just go away. It's not going away, and it's going to stink a lot more shortly.
There are a lot of moving parts in this mess, but here are some big ones.
First: As "Reason" notes, the last time the debt v. GDP was this out of whack was at the end of WW2. But in 1945, the United States was the only major industrial power on the planet; Britain was impoverished by the war and ended up letting the Empire go, Germany's and Japan's industry had been reduced to heaps of smoking rubble, and the Soviet Union was, well, the Soviet Union — they did OK making a lot of T-34s but their peacetime consumer economy was as good as non-existent. As the post-war boom started, America was where it was at, and if one wanted a refrigerator, American-made was what there was. But now? There's no V-D (Victory over Debt) day coming up to celebrate that will drop federal spending to a more sustainable level.
Second: There is a retirement pig still making its way down the economic python. Most of the Boomers save the last cohort (like me) are retired, but the rest of us are getting close, and soon, the first cohort of Gen-X (like my wife) will be retiring. This will place a huge burden on Social Security, Medicare, and all the various government retiree benefit programs — not to mention the legions of government employees with their generous defined-benefit pensions. Also, people are living longer now; when Social Security was passed in 1935, the average life expectancy was 60.2; when Medicare became law in 1965, it was 70.1. Today? 78.8. And, as Reason points out, Social Security and Medicare are the primary drivers of our debt.
Third: There are only three ways out of this calamity, as I keep saying: We can repudiate the federal debt, and send the globe into an economic tailspin; we can inflate our way out of it, sending us into a Zimbabwean cycle of hyper-inflation, or we can grow our way out of it — except that the ever-expanding federal Colussus is, by its nature, anti-growth. And it's probably too late for that option anyway.
The only thing that might help get us past this mess would be to cut government spending dramatically. Cut the federal government back to about 1800; the Constitution, after all, really authorized the federal government to do a few things: Run the military, deal with other nations, protect the borders, and arbitrate conflicts between the states. Cut everything but that — Javier Milei the government back to its constitutional origins, and eliminate maybe 95 percent of federal spending. Afuera!
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Could Swiss Style Fiscal Rules Work in the United States?
We are, sadly, almost certainly past the point of no return. The only way out is to take a meat axe to the federal government: cuts, and I mean real cuts, not reductions in the rate of spending increases. Dramatic cuts. Eviscerate the federal Colossus, bring it back to what the Founders envisioned, and we may have a chance.
Here's Reason's take on the whole mess:
We have mortgaged our grandchildren's futures, and history will rightly damn us for it.
