As the 2024 presidential election heats up, a critical issue has been noticeably absent from the debate: the United States’ ballooning national debt. Once a major talking point in presidential elections, the national debt has seemingly taken a backseat to other pressing concerns. However, experts warn that ignoring this issue could have severe economic repercussions.
In 2012, the national debt stood at $11.4 trillion, approximately 69.5% of the gross domestic product (GDP). Fast-forward to today, and that number has skyrocketed to about $28 trillion, or roughly 99% of GDP ¹. The Congressional Budget Office projects that this figure will top $51 trillion in the next decade, taking the debt-to-GDP ratio to 122% – higher than in the aftermath of World War II.
Despite these alarming numbers, neither Donald Trump nor Kamala Harris has addressed the issue in their campaigns. In fact, their proposed policies are expected to exacerbate the problem. Trump’s promise to extend his 2017 tax cuts and Harris’s plan for $25,000 in assistance for first-time homebuyers have led independent budget forecasters to estimate significant increases in the deficit.
According to the nonpartisan Tax Policy Center, Harris’s agenda would grow the deficit by up to $2.6 trillion over the next decade, while Trump’s proposals would increase the shortfall by $1.2 trillion ¹. The Penn Wharton Budget Model estimates that the deficit would rise by $4.1 trillion under Trump and $2 trillion under Harris.
Experts agree that the US economy cannot sustain such high levels of debt indefinitely. Economists at the Penn Wharton Budget Model predict that financial markets would not support publicly held debt surpassing 200% of GDP ¹. With the CBO forecasting that all federal government revenues will be directed towards social security and debt interest payments by the mid-2030s, future administrations face significant constraints in investing in growth-nurturing innovation or responding to emergencies.
The solution to the debt problem will require a combination of spending cuts and higher taxes. However, in an era of populism, politicians have little incentive to discuss difficult choices, and voters have little incentive to listen.
The National Debt Crisis: Key Statistics
- Current National Debt: Approximately $28 trillion
- Debt-to-GDP Ratio: 99%
- Projected National Debt by 2034: Over $51 trillion
- Projected Debt-to-GDP Ratio by 2034: 122%
The Consequences of Inaction
- Government Default: A scenario that would send shockwaves throughout the global economy
- Constrained Government Spending: Limiting investments in innovation and emergency response
- Increased Taxes: A necessary measure to address the debt crisis
As the presidential election approaches, it remains to be seen whether Trump or Harris will address the elephant in the room – the runaway US debt. One thing is certain: ignoring this issue will only make the problem worse.
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