Dear reader, I recognize that your eyes might glaze over at any mention of the nation’s $40tn federal debt. But your reaction to this mind-boggling number shouldn’t be ennui; it should be outrage and dismay.
Outrage is in order because the nation’s debt has climbed to more than $40tn under Donald Trump, even though back in 2016, when the debt was less than half what it is today, candidate Trump insisted that he’d totally eliminate the debt within eight years. That was yet another example of the Demagogue-in-Chief’s willingness to say anything, no matter how insincere or untrue, to woo voters.
Not only has Trump failed to reduce the debt, he has spectacularly increased it. Take Trump’s “big, beautiful bill” and the huge tax cuts it lavished upon the very rich and corporations. That legislation is expected to increase the nation’s debt by a whopping $3.4tn over the next decade. Worse, during Trump’s time as president, including his first term, the federal debt has climbed by a colossal $11.6tn.
Outrage is also in order because the trillions in tax cuts going to the rich and corporations could have instead been used to address the affordability crisis that is squeezing so many Americans. Those trillions could have gone to creating more affordable childcare for every family or increasing subsidies to hold down soaring healthcare premiums or expanding government aid to make college more affordable.
Trump’s tax cuts for the rich and the $40tn debt have worsened the affordability crisis in one important and painful way. They have helped push up long-term interest rates to their highest level in nearly two decades, and that has pushed up mortgage rates, too. The unhappy result: housing has become less affordable, when housing affordability has already been a big problem for young Americans. Higher mortgage rates often mean that homebuyers have to pay several hundred dollars more in interest each month.
Interest rates have climbed not only because investors are dismayed that the national debt has hit a record, but also because Trump’s tariffs and war against Iran have fueled inflation and because investors are unsettled by all the chaos Trump has created at home and abroad.
Outrage is also called for because of the way Trump and his Republican yes-men in Congress jumped to enact giant tax cuts when their super-wealthy donors and friends said jump. In a move that shows how rigged the system is, Trump and the GOP legislated these tax cuts for the rich and corporations even though the wealthy and corporations were already doing perfectly well and would continue doing just fine, with their mansions, yachts and private jets, even without those tax cuts. Of the $4.4tn in tax cuts in the “big, beautiful bill”, nearly half go to the richest 5% of Americans.
If any further evidence is needed to show that Republicans in Congress have sold their souls to billionaires, millionaires and corporations, the increased debt caused by the big, unbeautiful bill’s tax cuts will be a burden on our children and grandchildren for decades to come. By the mid-2030s, the nation will have to pay more than $2tn in interest payments each year to finance the federal debt. That’s double the $1tn a year we are paying now – $1tn is slightly less than what the government spends on Medicare, is higher than this year’s Pentagon budget and is more than five times what the federal government spends on education each year.
All this is maddening for another reason. In recent decades, Republicans held themselves out as the party of “fiscal responsibility”. But they’ve really become the party of fiscal irresponsibility. During George W Bush’s two terms, with his tax cuts tilted toward the wealthy and his expensive, ill-fated war against Iraq, the federal debt ballooned by 85% (by $4.9tn). In Trump’s first term, the debt soared by $7.8tn (a 39% increase), stemming from his initial big tax cuts for the rich as well as increased Pentagon spending – and then there was more than $2tn in emergency spending to stabilize the economy during the first year of the Covid-19 pandemic.
During Trump’s second term, the debt is likely to soar by nearly $8tn once again. Trump is pushing for a record $1.5tn annual defense budget, far higher than any previous year, even though it will send our country’s debt further into the stratosphere. Some of that money will go to redesigning aircraft carriers merely because Trump dislikes how the current ones look.
Bill Clinton was the last president to have an annual budget surplus, but Democratic presidents have also pushed up the federal debt. During Biden’s four years as president, the debt rose $8.4tn, partly because of the annual budget deficits he inherited from Trump and partly because of his $2tn-plus pandemic-era emergency spending package to stabilize families’ finances and ensure the US didn’t sink into a deep economic downturn.
The federal debt has grown even larger than the country’s overall gross domestic product. Indeed, the ratio of the debt to GDP will soon be higher than the record 106% where it stood when the second world war ended. Franklin D Roosevelt ran up huge debts for an urgent reason: to defeat Nazi Germany and its allies. In sharp contrast, under Trump, the US is running big deficits, of approximately $2tn a year, for the opposite of urgent reasons: to finance a disastrous war in Iran and to give big tax giveaways to two powerful groups that were already prospering, eg the ultra-wealthy and corporations.
It would be a very different thing if Trump were borrowing money to build a better future, as people do to build a new house or pay for college. But Trump is not jacking up the country’s debt to improve our future; he’s not spending to improve education, childcare or our country’s infrastructure or to fix the housing crisis.
I am not a fiscal conservative and nor are many Democrats, but it is a real concern that for the first time in US history, other countries and many investors seem truly worried about the record size of the federal debt. Those worries have spooked financial markets and pushed up interest rates.
As the midterm elections heat up, the Democrats should attack Trump and the Republicans over the huge, fast-growing federal debt. Democrats need to make clear that Republicans have become the party of fiscal irresponsibility.
We can agree that the $40tn debt isn’t a sexy issue, but the Democrats can and should turn it into a hard-hitting and winning campaign issue that they can use to hammer Trump and the Republicans, along with the affordability crisis and Trump’s calamitous war against Iran.
