NEWYou can now listen to Fox News articles! America’s national debt is rising and there are few solutions in sight. Total outstanding public debt exceeded $40 trillion for the first time in history, or almost $300,000 per household. This figure should alarm all Americans, but years of political promises of easy solutions have dulled the public’s sense of urgency. As the United States passes the grim $40 trillion milestone, it is essential to confront why such high debt is an existential threat to our republic and what realistic solutions remain. The most common benchmark is the debt-to-GDP ratio. The total public debt of the United States now exceeds 124% of GDP. Only a handful of countries are ranked worse, including Sudan, Venezuela and stagnant developed economies such as Japan, Greece and Italy. 50 TRILLION DEBT IS NOT A FAR THREAT. THE UNITED STATES IS MOVING TOWARD THAT No country should aspire to be among the highest in this metric, and yet the United States does. The US national debt reaches $40 trillion for the first time and there is little relief in sight. (Fox News) Even the debt held by the public, more than $32 trillion, is close to 100% of GDP. And according to the Congressional Budget Office, it is projected to reach 120% by 2036. TRUMP INTERVENES AS HOUSE GOP REVOLT PUTS SAVE AMERICA ACT AT THE CENTER OF SPENDING DEFENSE A rising debt-to-GDP ratio indicates the erosion of the United States’ ability to meet its existing obligations without heavy reliance on borrowing. Overwhelming national debt slows economic growth, puts upward pressure on inflation and interest rates, reduces investor confidence, diminishes the US dollar’s standing as a global currency, and can even lead to a fiscal crisis. These are not just theoretical risks: exorbitant debt produces concrete economic damage. One result is the displacement effect. Here’s how it works: JPMORGANCHASE TOP EXECUTIVE WARNS REGULATORY PROPOSAL COULD Squeeze credit for millions of small businesses The government borrows to pay off its debt obligations. It does this by selling bonds to finance deficits. This reduces the supply of funds available in the market. The result is upward pressure on interest rates and less capital for private investment. This makes it more difficult for companies to obtain loans and invest in job creation, innovation and expansion or for individuals to obtain loans. In short, more debt means less money flowing freely in the economy. The Congressional Budget Office estimates that for every dollar the deficit increases, private investment falls 33 cents. What’s more, an additional $1 trillion in debt reduces the long-term U.S. capital stock of productive assets by 0.7% to 0.8%. More public debt means less private capital formation, slower productivity growth, and ultimately less money in Americans’ pockets. These effects are silent but harmful. Unlike sudden shocks to the economy (trade disruptions, technological advances, or global conflicts), debt compounds over time. It is a useful tool for politicians to paper over current problems with huge amounts of spending while transferring the burden to future generations. JOHN ADAMS MADE A TERRIFYING PREDICTION. THE UNITED STATES IS CLOSE TO PROVING IT RIGHT Some politicians have absurdly denied the danger of debt and instead have convinced the public that the United States can spend without limit. The theory behind that argument is Modern Monetary Theory (MMT) and has been championed by New York Democratic Rep. Alexandria Ocasio-Cortez and Vermont independent Sen. Bernie Sanders’ top economist. They maintain that a fiat currency issuer as powerful as the United States can always spend its way out of the crisis. However, they ignore crowding out effects, the erosion of consumer confidence and the fact that currency ultimately depends on real economic value. Treating the dollar as unlimited political fuel is a sure path to rampant inflation and a loss of fiscal credibility. Prudent economic policy means tackling sustained levels of deficit spending and high national debt before both get even further out of control. Net interest costs have already exceeded $1 trillion a year and are projected to rise sharply, reaching more than $2 trillion within a decade and consuming a larger share of federal revenues. The simple solution is to eliminate federal deficits and balance the budget. Recent data shows a deficit of $1.8 trillion in 2025. Instead, the government must run a surplus and begin paying down its outstanding debt obligations. Restraining spending growth (particularly in major entitlement programs that create long-term imbalances) and freeing up the U.S. economy through policies that expand the productive private sector are essential. Incremental efficiency efforts, including state-level DOGE reform, help at the margin, but structural reform is necessary to ensure a sustainable budget. CLICK HERE FOR MORE OPINION FROM FOX NEWS Both parties spent America on this $40 trillion mess, so it’s a bipartisan responsibility for lawmakers to commit to taking decisive fiscal action now. Inaction guarantees higher interest payments, reduced private investment, less fiscal flexibility in times of crisis, and a higher tax or inflation burden for future generations. CLICK HERE TO DOWNLOAD THE FOX NEWS APP The clock is ticking and the choice is simple: act now or mortgage America’s future. Michael Bicksel is a former member of the Heritage Foundation’s Young Leaders Program. Nicole Huyer is a senior research associate at the Heritage Foundation’s Thomas A. Roe Institute for Economic Policy Studies.
