It’s the Debt, Stupid
The US National Debt Clock in 2009. In the 15 years since, the national debt has tripled to 35 trillion dollars today. Photo courtesy of Lotzman Katzman.
“It’s the economy, stupid,” famously quipped by political advisor Jim Carville during Bill Clinton’s 1992 campaign, became a simple yet decisive slogan that helped secure Clinton’s victory. Thirty years later, however, both Kamala Harris and Donald Trump have missed the economic elephant in the room. Moreover, voters have failed to call them out for it. The US national debt has risen to $35 trillion USD, with almost a third of that amount being added in the last four years. This dramatic rise stems from the revenue shortfall linked to the 2017 Tax Cuts, emergency spending during the pandemic, and the Inflation Reduction Act. Interest payments on the national debt exceed one trillion dollars: a figure greater than America’s total annual military expenditure. Even more staggeringly, the debt is currently 122% of GDP, a level not seen since World War II. Despite these stark figures, both Democratic and Republican presidential candidates remained complacent during their campaigns by proposing policies that would only add trillions more to the debt. By doing so, they continue a dangerous trend with a negative long-term economic health of the nation.
Indeed, both the Trump and Harris campaigns pitched fiscal policies that would add to the national debt. Both campaigns called for increased spending in the absence of viable mechanisms to raise the funds for that spending. Donald Trump, for his part, has proposed a major corporate tax rate reduction, as well as for an elimination of taxation on tips and social security benefits. To offset these reductions, Trump proposed raising tariffs on China imports by up to 60%. While this measure is likely to raise revenues for the US government, it risks escalating to a trade war and inflating prices for American consumers. Higher prices for consumers may undermine the revenue collected from the tariffs. Such a policy therefore fails to address the issue of the mounting debt entirely while only compounding existing problems for Americans. Kamala Harris, meanwhile, proposed expanding the child credit to $6,000 for newborn children. She has also come out in favor of providing $25,000 to first time home-buyers over the course of four years. To fund these initiatives, Harris proposed introducing a variety of taxes on long-term capital gains, as well as raising the corporate tax rate from 21% to 28%. While those plans appear fiscally sound on paper, they fall flat in their application. Although Harris’s plans raise more revenue, it offers no solution to rising government spending, a key element of reducing the debt to GDP ratio. Wall Street Journal calculations estimate that both platforms will raise the deficit by trillions, with Trump’s plan expected to add an estimated $6.5 trillion, and Harris’s to add roughly $4.2 trillion.
Regrettably, it seems that the concept of “fiscal responsibility,” long held as an important political maxim, has essentially disappeared from partisan discourse. In a recent interview conducted by the author for this article, Professor Waseem Noor, a lecturer in economics at Columbia University, claims that debt ignorance exists mostly because both parties have been responsible for adding to it. That notion is supported by recent economic data: in the past decade, both the Trump and Biden administrations have contributed trillions to national debt ($4.8 and $2.2, respectively). Because of that reality, blaming the opposition for debt increases has become near-impossible for either major party. It is therefore the responsibility of the voter to force parties to address the issue by demanding accountability. By doing so, politicians would be pushed to act to slow the growth of the national debt, avoiding potential worst-case scenarios.
Noor also points out that stopping the accumulation of debt is counterproductive electorally, since adding to it is essentially borrowing from future generations to cover present-day expenditures. Because a high proportion of today’s decision-makers have little reason to prioritize the economic well-being of future generations, the incentive for partisan action on fiscal responsibility is not overwhelmingly large. As a result, younger voters must push for their own future themselves. If politicians are forced to care about appealing to their demographic, they will have to campaign on reducing the debt so that young adults will not have to handle potential future economic crises that may arise because they continued to neglect it.
The reality is that an accelerating national debt will impact all Americans, regardless of their political affiliation. A significant consequence could be higher interest rates with payments that would reach $1.7 trillion annually by 2034, especially if confidence in the US’s ability to repay its debt declines. Higher interest rates mean higher cost of borrowing, leading to the average consumer facing more expensive loans. Even governments would have to borrow more to fulfill their payments. A likely repercussion of this dangerous fiscal cycle is the printing of money to pay down that debt, which could result in runaway inflation, weakening the dollar worldwide. Such a circumstance must be avoided to protect the economic wellbeing of the nation. Americans, subsequently, must demand their representatives and candidates to take a stance on curbing the growth of the debt.
To that end, a more productive outcome exists. If the US remains an innovative and productive powerhouse, confidence in US economic strength can remain stable and enable the US to maintain a high amount of debt relative to GDP—as has been the case this entire century—for the foreseeable future. That outcome, importantly, is less dependent on mitigative actions from the government. However, even in that scenario, kicking the can down the road and expecting the US economy’s resilience and productivity to be its saving grace is ultimately unsustainable, since the US will face challenges to its established dominance on the world stage in the coming decades. These challenges are likely to come in the form of renewed economic competition and a restructuring in global political alliances that may shift the center of power away from the US. A loss in US economic and geopolitical exceptionalism would enable debt confidence (a lender’s belief in the borrower to repay their loan) to slip and lead to higher interest rates. Due to the uncertainty of the future, slowing down the growth of the debt is absolutely imperative if the US wants to maintain its status in the international system.
If the US government keeps failing to address the accelerating national debt, voters must do more to hold elected officials accountable. Notably, a report from the Peter G. Peterson Foundation found that 91% of American voters wanted Trump and Harris to discuss plans to address the $35 trillion dollar budget. However, despite the universality of the issue, its salience is low. In an era of hyper-partisanship, candidates have prioritized mobilizing voters over presenting a fiscal policy engineered to reduce the debt. Sadly, it is considered more pragmatic for candidates to focus on divisive social issues. An issue of broad interest for Americans, such as addressing the national debt, is not enough to motivate voters to head to the polls, and therefore gets tossed to the wayside.
Admittedly, most available solutions are all exceedingly unpopular. One possible measure is tax hikes, but they are clearly unwanted. In fact, 38% of US adults were dissatisfied with how much they were paying in taxes in 2023, a five percent increase from only two years earlier. Another alternative is cutting fiscal spending, which is similarly undesirable: the vast majority of Americans oppose any cuts to social security and Medicare, for instance.
However, irrespective of the challenges they face in doing so, America’s youth must take action by bringing the debt back into the political spotlight. More broadly, the United States must avoid a fiscal crisis by slowing its debt growth trajectory and avoid higher borrowing costs. Despite its disastrous economic implications, the issue has lost political relevance. Younger voters must recognize that they will ultimately foot the bill. If voters concentrate on the future of the country, the negative impacts of the accelerating national debt might gain a foothold in the American consciousness. By adopting that approach and slowing the growth of the debt, younger generations will set themselves up to inherit a fiscally healthy nation.
Josh Groysberg (CC ’25) is a staff writer from Boston, MA. Josh studies economics-political science together with the business concentration. He can be reached at joshua.groysberg@columbia.edu.