The national debt doesn’t matter – until it does

Harold Black, PhDBlog

Who would have thought that the announced candidates for president could make Donald Trump seem normal? Consider the following positions that these candidates have endorsed:



  • Free college
  • Forgive $1.6 trillion in college debt
  • Green new deal
  • Decriminalize illegal border crossing
  • Reparations
  • Medicare for all regardless of citizenship status (elimination of private insurance)
  • Abolish the electoral college
  • Increase the size of the supreme court
  • Bash the rich (increase marginal tax to 70%, add wealth tax, financial transactions tax on Wall Street)
  • National legalization of marijuana for both medicinal and recreational purposes
  • Universal childcare
  • Guaranteed jobs
  • Breakup big tech companies
  • Breakup big banks
  • Universal basic income
  • Expand welfare safety net
  • Federal funded abortions
  • $15 minimum wage
  • Abolish ICE

Please raise your hand if you think any of these has a reasonable chance of passage. It does not matter to the left that if implemented these programs will fail. Most serve no purpose other than to increase the role of government and expand its costs without commensurate benefits to the public. It is as though the left has read my criticisms of their attempts to destroy the economy and decided to adopt them as their platform.

What is missing from the political debate on both sides is discussion of the national debt. The left has pooh poohed findings that their wish list would cost more than half the country’s $21 trillion GDP, suggesting that we can pay for it. The darling of the left from New York has suggested that it can be paid for out of the Pentagon’s budget (it’s only $600 billion). She also said that the majority of Americans do not earn a living wage and the only reason the unemployment rate is low is because people are working two jobs. On the right, one White House insider is quoted as saying that President Trump does not talk about the debt because “no one cares.” Well I care. I never thought I would miss Paul Ryan but he seemed to have been the only one in Washington who argued for fiscal soundness.

Currently the national debt is $22 trillion and growing at a rate greater than the growth in GDP. Importantly none of the textbook predictions of having a debt greater than GDP have come to pass. Indeed, Japan is the national debt poster child with a debt to GDP ratio of 236% compared to the US ratio of 108%. Japan has low growth but has demonstrated that as long as it can sell its government bonds, it can maintain a high debt burden without financial collapse. Japan sells its debt to itself.

The US sells its Treasurys mainly to its citizens and to foreigners. As long as it can do so, it can expand the debt. In the US, the growth in the debt is fueled by Social Security, Medicare, and Medicaid. Some projections show that in 30 years, those programs will equal or exceed the revenues collected by the government. Then, or before, the programs will have to be changed and/or taxes raised dramatically. Around 50% of Americans do not pay federal income taxes while the burden falls on the middle and upper incomes. It will be interesting to see if Americans will tolerate the increase in taxes necessary to continue to feed the maw of entitlements. Perhaps the politicians will accept logical changes in entitlements such as raising the age for full Social Security benefits and to fix Medicare rather than expanding it to give government total control over health care. But I won’t hold my breath.

Ominously, as de Tocqueville said, “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” I’m afraid that day has arrived.

Dr. Harold Black is professor emeritus at the University of Tennessee, Knoxville. This piece appeared in the USA TODAY NETWORK – TENNESSEE. Dr. Black can be reached