How America Can Get Its Debt Back Under Control
The US should be able to put its fiscal house in order without draconian tax hikes and painful spending cuts. The post-war years offer a roadmap.
America has a debt problem.
Photographer: Mark Thompson/Getty Images
With its $33.7 trillion of debt and trillion-dollar budget deficit, the US’s deteriorating fiscal situation is impossible to ignore. To simply balance the budget, a 29% across-the-board cut in spending would be necessary, even if the tax cuts enacted by Trump administration are allowed to expire at the end of 2025.
Rising interest rates have made the situation even worse. Analysis by Bloomberg Economics’ Maeva Cousin and David Wilcox shows that what appeared to be a sustainable debt situation just a few years ago has become thoroughly unsustainable. No wonder Fitch Ratings joined S&P Global Ratings in stripping the US of its AAA credit rating, and Moody’s Investors Service warned last week it may do the same.