Forty Trillion Dollars

Before discussing deficits, interest rates, bond markets, or Washington politics, try to comprehend just one number:

$40 trillion.

Imagine that you possessed $40 trillion and decided to spend $1 million every single day. Every morning you spend another million dollars. You do it seven days a week, every week of the year, without interruption. You never invest a dime, never earn interest, never slow down, and never miss a day.

It would take you roughly 109,500 years to spend $40 trillion.

That is the scale of the national debt America is approaching.

A million dollars a day sounds like almost unimaginable extravagance. Most people could not spend a million dollars in a day if they tried. Yet you could spend a million dollars every day for more than one hundred thousand years before exhausting $40 trillion.

That is what we owe.

And somehow we have managed to make it sound routine.

The phrase “national debt” has become so familiar that Americans hear it without feeling it. Forty trillion dollars becomes another figure scrolling beneath a television screen, another statistic quoted by an economist, another argument between Republicans and Democrats. The number is so enormous that the mind almost refuses to process it.

That psychological numbness may be more dangerous than the number itself.

Because $40 trillion is not merely something the federal government owes.

Ultimately, we owe it.

Our children owe it.

Our grandchildren inherit it.

And the consequences of carrying it eventually reach every American household.

For decades Washington has behaved as though debt could always be pushed farther into the future. Spend today, borrow today, promise reform tomorrow. When tomorrow arrives, repeat the process. Every administration inherits the problem, complains about it, contributes to it, and hands an even larger obligation to whoever comes next.

Political parties can argue indefinitely about who is responsible. Mathematics has no political affiliation.

Forty trillion dollars remains forty trillion dollars.

The frightening part is not simply that the number is enormous. The greater danger is what happens if the world eventually begins questioning America's ability or willingness to manage it.

The financial system functions because people believe promises will be honored. American Treasury securities have long represented one of the most trusted promises on Earth. Banks depend upon them. Pension funds depend upon them. Insurance companies depend upon them. Foreign governments depend upon them. Much of the world's financial architecture assumes that when the United States promises to repay money, the promise is essentially beyond question.

If that confidence ever seriously weakens, $40 trillion stops being an accounting problem.

It becomes a problem in your house.

Suppose investors begin demanding substantially higher interest rates before lending additional money to the United States. The cost of servicing the debt rises. More government revenue must be devoted simply to carrying obligations accumulated in the past. Less remains available for everything else Americans expect from government.

Defense must compete with debt service. Social Security must compete with debt service. Medicare must compete with debt service. Veterans programs, infrastructure, scientific research, disaster relief, education, national security and countless other responsibilities begin fighting over what remains.

The federal government gradually becomes less capable of choosing what it wants to do because more of its future has already been committed.

That is what excessive debt eventually destroys:

freedom of action.

Yesterday begins deciding what tomorrow can afford.

And then imagine that some genuine national emergency arrives.

Another severe recession. A financial panic. A major war. Another pandemic. A catastrophic cyberattack. A succession of hurricanes or other natural disasters. Perhaps something we cannot presently imagine.

America has survived enormous crises partly because it possessed extraordinary financial power. When catastrophe came, Washington could intervene. It could borrow enormous amounts of money, stabilize financial markets, support banks, finance wars, rebuild communities and prevent economic collapse.

We have come to assume that ability will always exist.

But $40 trillion forces an uncomfortable question:

What happens when the rescuer itself becomes financially constrained?

What happens when America needs enormous borrowing capacity precisely when lenders have become nervous about America's borrowing?

That is when the national debt reaches your front door.

Banks become cautious. Credit tightens. Businesses postpone investments. Construction projects are canceled. Companies stop expanding. Employers stop hiring. Layoffs follow. Families discover that mortgages are harder to obtain and more expensive to carry. Auto loans become more expensive. Credit becomes scarce precisely when people and businesses need it most.

The national debt suddenly becomes your mortgage payment.

It becomes your job.

It becomes your business.

Then it reaches your retirement.

Millions of Americans have spent their working lives building 401(k)s, IRAs, pensions and investment accounts based upon confidence in the basic stability of the American financial system. A serious crisis involving government debt would not remain neatly confined to Washington. Fear would move through stocks, bonds, banks, businesses and real estate.

Retirement accounts could fall sharply.

A thirty-year-old may have decades to recover.

A seventy-five-year-old may not.

Markets can wait.

Human beings cannot.

Then consider Social Security and Medicare.

Millions of Americans organize their lives around those programs. Social Security checks pay mortgages, electric bills, insurance premiums, groceries and prescriptions. Medicare supports a health-care system upon which tens of millions of older Americans depend.

A government facing severe fiscal constraints eventually has limited options. It can raise taxes. It can reduce spending. It can restrain benefits. It can change eligibility. It can reduce reimbursements. It can borrow still more.

Or it can allow inflation to quietly accomplish what elected officials are afraid to announce publicly.

Inflation may be the most deceptive form of fiscal decline because nobody sends you a letter informing you that you have become poorer. The number printed on your bank statement remains the same. The purchasing power behind it does not.

Your Social Security check still arrives, but buys less.

Your pension still arrives, but buys less.

Your savings are still there, but buy less.

Your wages may increase, yet groceries, electricity, insurance, housing and medical care rise faster.

You have not technically lost your money.

You have lost what your money can do.

That is why America does not have to experience some spectacular bankruptcy for ordinary Americans to experience the consequences of national fiscal failure.

The decline could come through a thousand smaller amputations.

Your retirement becomes less secure. Your taxes rise. Your savings lose purchasing power. Your Social Security buys less. Your Medicare choices narrow. Your children cannot afford homes. Businesses invest less. Jobs become less secure. Local governments struggle. Infrastructure deteriorates. National priorities shrink.

The country remains standing.

The flag still flies.

Congress still meets.

Football games are still played on Sunday.

People still go to restaurants and drive to work.

But gradually Americans discover that they are poorer, less secure and more constrained than the generation before them.

That is how nations often decline.

Not with a trumpet blast announcing the end.

With diminishing choices.

Great powers begin spending more money maintaining what they already owe and less money building what comes next. Infrastructure ages. Research gets postponed. Military modernization slows. Public services deteriorate. Every constituency fights to protect itself while politicians postpone the decisions nobody wants to make.

Eventually the past becomes so expensive that it begins consuming the future.

And this brings us back to $40 trillion.

Spend a million dollars every day and it would take approximately 109,500 years to spend it.

Yet somehow Americans are expected to regard owing that amount as merely another stage in the ordinary operation of government.

It is not ordinary.

It is extraordinary.

There is no magical cliff at precisely $40 trillion. America will not cross that number one afternoon and collapse the following morning. Pretending otherwise would be irresponsible.

But pretending the number does not matter would be even more irresponsible.

Forty trillion dollars tells us something about direction.

It tells us how comfortable we have become borrowing from a future that has not yet arrived. It tells us how easily temporary deficits became permanent habits. It tells us how thoroughly our political system has learned to enjoy spending while postponing payment.

Most of all, it tells us how much of tomorrow we have already promised away.

The deepest threat may therefore be neither economic nor political.

It may be psychological.

Human beings are remarkably capable of adapting to approaching danger. The strange sound coming from the engine becomes less alarming every morning the car continues running. The crack in the foundation becomes part of the house because the house remained standing yesterday.

Debt works the same way.

We survived one enormous level of debt, so the next one seemed acceptable. Then another. Then another.

Now we arrive at $40 trillion, and the extraordinary has become familiar.

Familiarity is not safety.

History is filled with governments, companies and individuals who remained solvent right up until the moment they weren't. Their mistake was rarely an inability to see the numbers.

Their mistake was believing they had more time.

America still possesses enormous wealth, immense productive capacity and extraordinary economic power. We can change course. Nothing about decline is inevitable.

But neither is survival automatic.

The longer we postpone serious decisions, the more painful those decisions become. Eventually governments reach a point where they no longer choose among good alternatives. They choose among bad ones.

Raise taxes.

Cut benefits.

Reduce services.

Accept inflation.

Borrow still more.

Every path extracts a price because earlier generations refused to pay one.

That is what $40 trillion ultimately represents.

Not simply money.

Choices already made. Income already claimed. Freedom already surrendered. A portion of the future already spent.

So when someone asks what a $40 trillion national debt has to do with his individual life, the answer should not require an economics degree.

It potentially has everything to do with it.

Your home. Your job. Your retirement. Your Social Security. Your Medicare. Your taxes. Your savings. Your children's ability to buy a house. The purchasing power of every dollar you have accumulated. And the ability of your country to respond when the next genuine catastrophe arrives.

Return once more to the only comparison necessary to understand the enormity of what we are discussing.

Imagine spending $1 million today.

Tomorrow, spend another million.

The next day, another million.

Keep doing it every single day.

After a century, you would barely have begun.

After a thousand years, you would still have an almost incomprehensible amount left.

You would need approximately 109,500 years to finally spend it all.

That is $40 trillion.

And America is about to owe it.