How can the United States steer clear of the fiscal crisis that everyone sees coming? The answer lies in voter education.
Of course, the U.S. can avoid a fiscal crisis and improve its economic outlook simultaneously. This would not require magic, but it would require our representatives to vote for programs that our voters do not support. That will not happen.
The facts are clear, and even the federal government acknowledges the danger. According to the nonpartisan Congressional Budget Office and the Treasury Department in its annual financial statement, the United States is on an unsustainable fiscal path.
The American public must understand how serious this problem has become. Without that understanding, there will be no appetite for real solutions. Our country is destined to fail if it continues on its current course, which includes a $38 trillion national debt and multitrillion-dollar deficits projected indefinitely into the future. I believe we have less than a decade before the real crisis arrives.
We are financing our government by borrowing on an unprecedented scale. In 2024 alone, the United States had to issue $10 trillion in new debt to pay its existing obligations. When the supply of new debt eventually exceeds the demand for it, we will face the real crisis, one that will destabilize our entire economy. History offers many examples of this happening. Once-great civilizations destroyed themselves by living on credit and mortgaging the future until there was nothing left to pledge. That should be a sobering lesson for us all.
So, how do we fix the problem? The path forward begins with fiscal discipline. By cutting unnecessary spending and signaling a renewed commitment to responsible governance, the United States would restore confidence among investors, businesses, and consumers alike.
We must reform programs that are creating our problems. Here are a few ideas based on proven economics.
Inflation: Balance the budget, and it goes away.
Interest rates: Balance the budget, and they go back to normal.
Economic growth: Balance the budget by cutting expenses, and we will grow rapidly.
Social Security: The trust funds are projected to be exhausted in seven years. Privatize the system over time.
Medical insurance: Scrap the Affordable Care Act, which is not affordable, and go to a market-based insurance system.
Medicare: Reform it into a voucher-based system.
Medicaid: Remove the federal government’s involvement, block grant-limited fixed funds to the states, and let them handle it.
Taxation: Simplify. Start over and get rid of the corrupting cronyism and all the special interests.
If these solutions seem obvious, one might ask why they have not already been implemented. The answer is that enacting them requires Congress to make extraordinarily difficult decisions. However, most members of Congress are more focused on the next election than on the next generation. Real reform will only occur when the voting public understands the issues and demands it. Legislators will not act boldly unless public sentiment is firmly behind them.
President Abraham Lincoln understood this reality when he said, “In this age and in this country, public sentiment is everything. With it, nothing can fail; against it, nothing can succeed. Whoever molds public sentiment goes deeper than he who enacts statutes or pronounces judicial decisions.”
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Today, the public does not fully understand the severity of our fiscal challenges. Most Americans are unaware that continued inaction will ultimately lead to national bankruptcy. They do not yet understand that solving this problem will require difficult trade-offs and shared sacrifice today for the long-term benefits resulting from sound economic policy. Until that changes, the political system will continue in a death spiral.
No change will happen, however, without a major effort to educate the public. The most important audience is not in Washington or on Wall Street but on Main Street. When voters understand the truth, they will empower leaders to act responsibly and support them in their efforts. Only then will our representatives have the political will to make the choices that can restore America’s fiscal health and secure its future prosperity.
Les Rubin is the founder and president of Main Street Economics.