If the 2024 presidential election ever gets around to serious issues, you’re likely to hear a lot of happy talk from Kamala Harris and Donald Trump. The Democratic and Republican presidential nominees have a lot of plans for tax cuts and government giveaways, customized to please each candidate’s desired constituencies.
Both candidates, however, are whistling past America’s biggest economic challenge: A gargantuan national debt that is going to hamstring the flexibility of future presidents like never before. In the worst outcome, a debt crisis could trigger a nasty recession and years of punishing fiscal austerity that will drive voters to new levels of vexation.
The national debt recently hit a new record high of $35 trillion, and it’s only going to keep growing. Debt scolds have been warning about unsustainable levels of US debt for 30 years, and many predictions of a debt crisis haven’t come to pass.
But the United States is now in unprecedented territory for any government, ever, and financial markets have begun flinching at all the debt the US Treasury is issuing. Some analysts think the debt crisis has already begun.
In a recent episode of the Yahoo Finance Capitol Gains podcast above — see the 13:30 mark — debt expert Brian Riedl of the Manhattan Institute summarized what the nation needs to do to get the debt under control and forestall a crisis. Riedl recently wrote a 43-page report on the problem, which Yahoo Finance explained in a July 9 story.
The good news is that the United States doesn’t need to pay off the entire national debt — far from it. If we can stabilize the debt at current levels, which means sharply reducing annual deficits, it would put the nation on much sounder footing and probably be sustainable indefinitely, barring dramatic unforeseen developments such as a large war.