The National Debt: Where It Stands and What Looms Ahead

Earlier this summer, President Biden signed into law the Fiscal Responsibility Act, concluding months of intense debate on the debt ceiling. Passed just two days before the $31.4 trillion ceiling was reached, the Act suspends the limit on federal debt through January 1, 2025 but provides some caps on discretionary spending. The congressional disagreement over spending limits has aggravated what remains an unresolved concern for Americans: the national debt. Since the deal was reached, the debt has already soared to over $32.5 trillion, belying promises of reduction.

What are the real costs of our national debt? To what degree will increases in revenue solve the debt problem? Are large-scale spending cuts a realistic solution to the debt crisis? Here is a selection of thought leaders sympathetic to the free market to shed light on these questions.

• Manhattan Institute senior fellow Allison Schrager argues that, while the drama over reaching a deal has subsided, the problem that the debt is far too large remains and the debt-to-GDP ratio is expected to worsen in the decades ahead.
• Economist John Cochrane warns inflation will be a continuing problem until the national debt is addressed.
• Alan Rappeport of the New York Times highlights that while the debt is nine years ahead of pre-pandemic projections, neither party has displayed a commitment to tackling the deficit’s biggest drivers, including Social Security and Medicare.
• MI senior fellow Judge Glock contends that the real point of concern is not the brinksmanship among lawmakers but the unprecedented national debt.
• John Kasich, former governor of Ohio and House Budget Committee chairman, and Leon E. Panetta, former Secretary of Defense, take a more optimistic stance on the Fiscal Responsibility Act, arguing that it is a good first step towards adequately addressing the national debt.
• American Enterprise Institute's Michael R. Strain praises Speaker of the House Kevin McCarthy in National Review for arriving at a successful deal and is optimistic that the Fiscal Responsibility Act will succeed in contributing to $1.5 trillion in deficit reduction.
• In an interview with the Wall Street Journal, Vivek Ramaswamy, GOP presidential candidate and founder of Strive Capital, suggests that the debt-ceiling debate is tangential to more important questions of economic growth such as cutting taxes and unleashing productivity in the energy sector.