For years, Republicans have vowed to focus on the biggest issue plaguing the United States: our federal debt. Now, in the wake of their victory earlier this month, they have a chance to make good on those promises.

　　One step that has already been announced is that Elon Musk and Vivek Ramaswamy will head up a new “government efficiency commission” to “scrutinize federal spending and slash programs deemed wasteful.” Musk has even agreed that these cuts will cause hardship for many American people and corporations currently living off the teat of government subsidies, at least in the short run. Politicians shy away from the position that they’re going to cut spending. And when they do embrace such a position, they hardly ever acknowledge that this will be painful.

　　It will take more than a blue-ribbon commission, however, to address the debt problem at its deepest level. If Washington is going to get serious about it, then both Congress and the executive branch will have to make tough choices.

　　A Problem Hiding in Plain Sight

　　With extraordinarily high prices for healthcare, education, and housing, the cumulative effect of inflation, and high interest rates, economic life is very difficult for ordinary Americans. So why is the federal debt one of the biggest economic issues facing the United States? Because at this point, the debt is so large that it already hampers the nation’s capabilities and it threatens to imperil the livelihood of every person in the US.

　　I am not the only person to think so. Retired Admiral Michael Mullen, then the Chairman of the Joint Chiefs of Staff, said so in 2010, when the federal debt was a mere $13.5 trillion and an annual federal deficit of $1.29 trillion, compared to today’s debt of $36 trillion and a $1.8 trillion deficit for last year. In January, Sen. Joe Manchin, and in May, Sen. Chuck Grassley, both echoed Mullen’s remarks and castigated Congress, Republicans and Democrats alike, for failing to rein in spending. And on the Law Liberty Podcast, former Indiana governor, Mitch Daniels, worries that the opportunity to address the federal debt is slipping away.

　　Even more troubling is the fact that Congress shows no sign of taking the debt issue seriously. This past June, the CBO released a ten-year budget outlook, predicting that if nothing changes, these figures will continue to grow, reaching $50.6 trillion in total federal debt held by the public and $2.8 trillion in annual deficits.According to some estimates, the national debt could potentially balloon to $55 or even $60 trillion by 2034. Currently, the United States pays about 14 percent of its total budget on interest alone, and this is expected to grow going forward.

　　To put the scale of the problem into context, let’s relate our national debt to geography. The Earth has a circumference at the equator of 24,901 miles. $35.9 trillion in $100 bills stacked one on top of the other would be 24,273 miles tall. In other words, it would be very close to being able to encircle the globe.

　　Making matters even worse is that the United States spent more money in the 2023 fiscal year servicing the debt than on national defense. In fact, net interest payments are already the third largest component of federal spending, behind only Social Security and Health (which excludes Medicare). As the debt grows, and interest rates stay higher, the amount of money that the federal government must spend in service to the debt will continue to rise.

　　Like all households with massive credit card debts, this puts a serious limit on the ability of the federal government to properly fund vital operations for our national security.

　　The national debt is a major issue that is hiding in plain sight. It will likely take decades of concerted efforts to bring the nation’s fiscal house back in order.

　　Chief among these is, obviously, the US military. Other countries continue to increase their war-making capacity with increased naval forces, long-range ballistic missiles, and the ever-looming threat of space-based weaponry. Cyber warfare, digital espionage, and nuclear proliferation, especially with Russia and North Korea, continue to become more of a threat. New emerging technologies such as AI, quantum computing, and biotechnology can all potentially be leveraged by adversaries for military advantages. The United States cannot afford to fall behind in these “arms races.”

　　With an ever-growing portion of our federal budget going solely toward servicing the debt, it becomes harder and harder to fully fund these operations while also not taxing the private sector into the ground, thereby destroying job opportunities and wage growth for everyone.

　　A Path Forward

　　So what can the election’s winners do about the debt problem?

　　First, they should recognize that paying off the entire federal debt is, quite simply, not an option. Even if every single penny from the federal budget were spent on paying down the national debt for the entirety of Trump’s second presidency, they would still fall short of paying it off. Instead, Trump and congressional Republicans need to look at structural reforms.

　　The most straightforward of these would be to lower the debt ceiling. Since its creation in 1917 with the Second Liberty Bond Act and modifications made by the 1939 and 1941 Public Debt Acts, the debt ceiling has enabled deficit spending—not constrained it. According to the US Treasury, “Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit.” Instead of serving as a check on spending, the debt ceiling has become a tool for legislators to play political chicken, with politicians and policymakers leveraging the threat of government shutdowns to secure votes that would otherwise fail to pass.

　　Second, Congress could reform its budget rules to prevent passing a budget that contains deficit spending. As it stands right now, the federal budget for the current fiscal year (which began on October 1, 2024) has within it $1.7 trillion of planned deficit spending. Congress has passed a budget resolution each year going back to at least the year 2000 that involves planning to spend more money than they take in. In what world is it responsible for Congress to continually plan to spend more money than they collect?

　　Even a cursory look at the current fiscal situation belies the truth: Congress has a spending problem. The median individual in the US earns $57,150 per year. If they followed Congress’s fiscal wisdom, they would have $445,000 in credit card debt and would be planning to spend $76,785 this year. Just as it would be foolish to say that this person faced a “revenue problem,” so too with the federal government.

　　Finally, any Congress serious about taming the debt has to engage in entitlement reform. Far too many people are receiving far too much in federal entitlements. But further complicating matters are the rules governing these programs. They specify what the recipient can purchase, from cold chicken (but not hot chicken) to iced coffee (but not hot coffee) and specific brands of yogurt, cereal, and pasta, not any brand of yogurt, cereal, and pasta.

　　What is often dismissed, though, is the cost of enforcing these rules. How are we to know whether a recipient is purchasing the correct items if their behavior is not monitored and how much does this monitoring and enforcing cost? It’s hard to say, but the answer is clearly not “zero” if only because the enforcers do not work for free. Such costs are thus about funding the bureaucracy and do not contribute to reducing poverty in the slightest.

　　Not Acting is Not an Option

　　The national debt is a major issue that is hiding in plain sight. It is already too large to be completely paid off any time soon and will likely take decades of concerted efforts to bring the nation’s fiscal house back in order.

　　That’s all the more reason to focus on the benefits of restoring sanity to the nation’s finances now. First, it would allow Congress the capacity to lower taxes, letting more Americans keep more of the money that they earn. This means higher after-tax incomes for everyone.

　　Second, real debt reduction would cut off the “death spiral” of indebted countries as they find themselves continually having to raise taxes as their debt-to-GDP ratio continues to climb. Intuitively, raising taxes would increase revenues and allow the government to pay down its debt. Regrettably, this is not as true as we might like it to be, with tax revenues staying relatively consistent as a percentage of GDP despite “major variation in individual and corporate tax rates over the past 70 years.”

　　But what changing tax rates can do is reduce GDP growth and, in doing so, reduce the growth rate of tax revenues necessary to finance paying down the debt.

　　Finally, serious debt reform would help allocate the nation’s tax revenue toward more productive ends, instead of merely paying money on the principle of costs incurred on debt. A nation cannot advance the interests of its citizens when it is paying a significant portion of its budget on interest on debt.

　　Streamlining the federal government, addressing its manifold inefficiencies, and reducing the sheer number of public employees that work for it are all valuable goals and long overdue. They must, however, go hand-in-hand with a systematic effort to not just rein in, but actually pay down our public debt. Time is running out.