The federal government’s gross national debt has surpassed $34 trillion, a record high that foreshadows the coming political and economic challenges to improve America’s balance sheet in the coming years. Candidates Joe Biden and Donald Trump have added trillions to the national debt during their recent presidential administrations, leaving America at a critical juncture that demands urgent, bipartisan action.
Unfortunately, a slightly better understanding of the dangers of fiscal irresponsibility doesn’t translate into the political courage to change course and act responsibly. So let me make the case, once again, that fiscal stability should be at the top of everyone’s priority list. I hope legislators won’t think that to fix it, all they need to do is jack up defense spending. The real issue is interest payments consuming a large share of the budget. That makes austerity the answer.
That brings us to what’s so odd today: This is a solvable problem. The U.S. has successfully navigated past debt challenges, notably in the 1990s, and the potential political rewards are enormous. So is the risk of being blamed for a crisis triggered by a credit rating downgrade or loss of confidence among international lenders, which looms large and can happen with surprising speed. Moreover, the specter of major debt holders like China dumping U.S.