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America’s debt denial has gone global
My high school history teacher, back in 1989, asked our class to name the single biggest problem facing the United States. We wrote our answers anonymously, and he tallied the results. When he read mine aloud — “the federal government’s debt” — he rolled his eyes, as if I’d said something idiotic.I didn’t name debt nearly 40 years ago just because I think borrowing is bad. I named it because elected officials were already pretending deficit spending wasn’t a problem — and because no one seemed willing to hold the government accountable for it.The more the Fed prints, the weaker the dollar becomes. The weaker the dollar becomes, the more the world doubts it.Almost four decades on, nothing has changed. The problem has only grown — as every neglected problem does.In 1989, the budget deficit was $153 billion. The total national debt stood at $2.86 trillion.By 2024, the annual deficit had exploded to $1.8 trillion, and the total debt hit $35 trillion. Interest payments now consume 3% of GDP, and they’re still climbing. Meanwhile, the country faces $210 trillion in unfunded liabilities, mostly Social Security and Medicare.The United States is broke. And Americans act as if it doesn’t matter.Washington pretends everything’s fineThe federal government has been shut down for three weeks. Republicans want to keep spending at ruinous levels. Democrats want to spend even more ruinously. Both sides ignore the obvious: We’re bankrupt. And nobody in America seems to care.Congress hasn’t passed a real budget since 1996. For nearly 30 years, lawmakers have funded everything through “continuing resolutions,” which automatically renew old spending and add new layers on top. Every “temporary” increase becomes permanent.The 2009 “one-time” $831 billion stimulus? Still baked in. The $4.6 trillion COVID “relief” binge? Never rolled back. Dozens of other “emergency” expenditures have quietly become fixtures of federal spending.Year after year, Washington keeps the faucet open — and the debt grows.By 2024, U.S. GDP was $29.2 trillion. Federal debt was $35 trillion. That’s a debt-to-GDP ratio of 123%. And Washington keeps spending as if it can print reality.No one in America seems to care.The world is awakeningThe rest of the world is starting to notice.To fund its deficits, the U.S. Treasury sells bonds — IOUs that investors buy with the promise of repayment plus interest. Lately, those auctions have gone poorly. The world’s appetite for American debt is fading.As one financial analysis put it: “Given the poor state of the American fiscal situation, auctions will likely remain large for the foreseeable future. The risk that markets will push back is rising.”Another report warned that persistent $2 trillion deficits during peacetime raise “important questions about what might happen during a recession or war.”When investors balk, the Federal Reserve steps in, printing money to buy the debt. That fuels inflation — the same inflation that has already stripped 87% of the dollar’s value since we abandoned the gold standard in 1971.The more the Fed prints, the weaker the dollar becomes. The weaker the dollar becomes, the more the world doubts it.The emperor’s new clothesThe only thing still propping up the dollar is its role as the world’s reserve currency — the global default for trade and central bank holdings since 1944. That status lets America keep spending money it doesn’t have. But the illusion can’t last forever.RELATED: The American dream now comes with 23% interest wenjin chen via iStock/Getty ImagesThe BRICS nations — Brazil, Russia, India, China, and South Africa — are challenging the dollar’s dominance. They’ve added members such as Iran, Egypt, Ethiopia, and the United Arab Emirates. Saudi Arabia, the world’s second-largest oil producer, has been invited to join. At least 40 other nations are lining up.As Business Insider put it, “BRICS is consolidating its global power and influence. This should be a key cause of concern for the U.S., as new members could amplify de-dollarization.”So what has Washington done? Cut spending? Tighten the money supply? Restore fiscal sanity? Of course not.Instead, the government rattles sabers. President Donald Trump recently threatened a 100% tariff on the BRICS bloc countries if they move to undermine the dollar — as if bluster could paper over decades of reckless spending.The United States is broke but still pretending otherwise. Washington spends like a drunk who keeps ordering drinks on a canceled credit card. The world is beginning to call the bluff.And the American people? They’re still sleepwalking — as they have been for decades.
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