$34,824,988,766,984.
Think about that — more than $34 trillion, with a “t.” That is the U.S. debt, and as the United States continues to run deficits, it’s increasing at $8.5 billion daily. Last month, the federal government added $347 billion to the debt, which will cross $35 trillion in short order.
Should you be worried? Is this a problem?
A couple of weeks ago, two prominent individuals in the political landscape gave opposing answers to these questions. Nobel Prize-winning economist Paul Krugman argued in the New York Times that you should not be too worried about the national debt given the vast scope of the national and global economies. In contrast, Rep. Thomas Massie, R-Ky., appeared on Tucker Carlson’s podcast wearing his famous debt clock pin, which tracks the national debt in real time, arguing that the debt is an urgent issue.
Massie’s concern is well-placed. The American electorate should be concerned about the national debt. Running continuous deficits not only presents practical challenges to the economy that negatively affects our living standards but also poses moral dilemmas we must address.
Ever-increasing deficits and expanding debt harm consumers and businesses. As increasing deficit financing requires more significant treasury purchases, interest rates will rise throughout the economy, suppressing investment in private, productive activities. This will reduce opportunity, job and wage growth, and overall prosperity.
The Federal Reserve could suppress interest rates by buying the treasuries increasing the money supply, but that would cause inflation, devaluing the dollar and squeezing pocketbooks. We’ve been watching that play out over the past three years.
The economic issues associated with increasing deficits and debt are often at the forefront of these conversations, but ethical considerations get lost in the shuffle.
Krugman, the Nobel economist, proclaims that Americans “should not obsess about the national debt” so long as the debt remains near current levels compared to gross domestic product. It is unlikely the debt-to-GDP ratio will remain near current levels, as Democrats and Republicans have showcased a proclivity to increase spending, but it disregards an integral aspect of this debate: Running massive deficits is immoral.
We understand that employing coercion against others is wrong. If you want to buy yourself something, buy someone else a gift, or donate to a cause, you don’t go to your neighbor’s house, rob them at gunpoint, and then use the money to fund your activities. Coercion and theft always damage people’s happiness and prosperity, compromising social cohesion.
The government is not exempt from this truth. The national debt is institutionalized theft on a massive scale. As it climbs, we’re saddling future generations with higher and higher tax obligations. Through what force will compliance with future tax codes be elicited? Coercion. The government is ultimately a coercive entity, backed by the implicit threat of fines, imprisonment or violence at the hands of the state. Thus, the government will have to usurp the money of future generations in the form of taxes through coercion to deal with its mountain of debt.
Our obligation to reign in spending and reduce our national debt is not merely prudential, it’s a moral imperative. Unless voters make it their concern, the national debt will continue to negatively affect our economic prospects by crowding out private investment and unjustly infringing on the freedoms of posterity.
