The National Debt Is a Political Problem Before It Is an Economic One

The United States has now crossed a threshold that would have seemed almost abstract a generation ago: the national debt has surpassed $40 trillion. The number is difficult to comprehend, but its significance is not simply that it is large. The more important question is what the number reveals about the political choices the country has repeatedly made.

The United States did not arrive at $40 trillion because of one president, one party, or one piece of legislation. Debt accumulated under administrations of both parties, through wars, tax reductions, new spending programs, economic emergencies, and years in which politicians found it easier to promise benefits than explain their costs. The Treasury's debt surpassed $40 trillion this week, only months after crossing $39 trillion.

That history matters because the usual political argument over the debt is incomplete. Republicans frequently emphasize spending, while Democrats often emphasize revenue and the distributional consequences of spending cuts. Both arguments contain truth, but neither is sufficient on its own.

The federal government spends money on fundamentally different things. Some expenditures are investments, some are social insurance, some are defense, and some are simply the cost of maintaining an enormous existing bureaucracy. Treating all spending as equally unnecessary is intellectually careless. Treating all spending as equally indispensable is equally irresponsible.

The largest difficulty is entitlement spending, particularly programs such as Social Security and Medicare whose costs are tied to an aging population. These programs are popular because they provide benefits to people who have planned their lives around them. That makes them politically difficult to reform, but political difficulty is not evidence that reform is unnecessary.

There is also the revenue side of the equation. The federal government cannot permanently promise a modern welfare state, an enormous military establishment, tax reductions, and relatively low taxes on a broad portion of the population while assuming economic growth will solve the difference. Growth helps. It does not repeal arithmetic.

The most revealing feature of the current debt debate is therefore not the $40 trillion figure itself. It is the absence of an agreement about what Americans are willing to pay for.

A government reflects the priorities of the society financing it. If Americans want substantial retirement benefits, extensive health programs, a powerful military, infrastructure investment, scientific research, and other federal services, then the country must decide how those priorities should be financed. If Americans want lower taxes, they must also be prepared to accept a government that does less.

For years, politicians have attempted to avoid that choice. They have described tax cuts as self-financing, spending as temporary, deficits as someone else's problem, and future reforms as politically impossible. Eventually, those arguments collide with reality.

The $40 trillion milestone should therefore not produce panic. The United States remains an extraordinarily wealthy country with substantial economic capacity. Nor should it produce indifference.

It should produce an adult conversation.

The central fiscal question is not whether America can survive a $40 trillion debt. It almost certainly can. The question is whether American democracy is capable of making difficult choices before circumstances force those choices upon it.

That is a considerably harder question—and a more important one.