This Percentage is Too Important to Be Ignored, Yet Both Candidates did Not Even Talk About It
America has been the leading economic and military power in the world for decades. This kind of dominance has created a sense of invincibility—one that both presidential candidates seem to share. But in this race, there’s an issue that no one is talking about, and it could be a big problem for this modern empire. The national debt is growing, and with it comes economic risks that could shake America’s strength. As of August 2024, the public debt of the United States was around $35.26 trillion. Both candidates have chosen to focus on other issues, avoiding the uncomfortable truth about the nation’s finances. Ignoring this crucial economic number could have serious consequences for the country's future.
Biden-Harris Presidency
The Biden-Harris administration has had both successes and struggles with the economy. Unemployment is at historic lows, and job growth, although uneven, has been steady. Infrastructure projects aim to fix roads, bridges, and energy systems, with big investments to modernize the country’s aging foundations. However, inflation has been stubborn, making life more expensive and making it hard for families to keep up. Many young people, especially Generation Z, are feeling the squeeze, as wages aren’t keeping up with the rising cost of living. The administration's response has been interest rate hikes, which have received mixed reactions—some say it’s not enough, while others think it’s the right move to avoid harming economic growth. The average interest rate for all federal government-issued interest-bearing debt has jumped in recent years, reaching 3.28% as of June 2024, more than double what it was in 2020. Supply chain issues and changes in global energy markets have also made it hard to keep prices stable. The result is a mixed record: there have been real achievements, but also significant challenges that leave doubts about what comes next.
Global Perspective
Vice President Kamala Harris and former President Donald Trump have very different ideas about America's role in the world. Harris wants to focus on diplomacy, rebuilding alliances, and promoting democracy, believing it's important for the US to stay involved in global institutions. Trump, on the other hand, wants to focus more on America itself, reducing international commitments and questioning the value of old alliances. Harris aims to build coalitions to face issues like climate change and rising authoritarianism, while Trump promotes economic nationalism, pushing for trade deals that put "America First" and cutting foreign aid. Despite their differences, neither of them has put America’s financial health at the center of their foreign policy plans. The result is that the connection between international policy and the economy is being ignored, leaving voters with little understanding of how these choices impact the budget.
Economic Plans
When you look at the economic plans of both candidates, one thing stands out—they are both focused on more spending. Harris wants to invest in infrastructure, healthcare, and renewable energy, saying this will boost economic growth and create millions of jobs. These investments are supposed to address inequality, fight climate change, and keep America competitive in a changing world. Trump, meanwhile, focuses on tax cuts and defense spending, saying that less regulation and lower taxes will grow the economy by encouraging business investment. According to the Committee for a Responsible Federal Budget, Harris’s campaign plan would increase the debt by $3.5 trillion through 2035, while Trump’s plan would increase the debt by $7.5 trillion. Neither candidate, though, is offering a conservative plan to manage the national debt. Both seem to believe in spending to fuel growth—but without addressing how to pay for it or control the rising debt. This raises big questions about how long these plans can work, especially as the debt keeps climbing. The growing debt isn't just a government problem—it trickles down to individuals too, with Generation Z already burdened by student loans, credit card debt, and high living costs.
Debt Viability
This approach of 'spend now, worry later' brings serious concerns about how sustainable America’s economy is in the long run. The debt-to-GDP ratio is now at 120% as of Q2 2024, a level similar to the peak during World War II. While this number alone doesn’t mean immediate disaster, its fast growth is worrying, especially since interest payments on this debt are expected to grow significantly in the next few years. The Congressional Budget Office (CBO) projects that interest payments could become the largest federal expense by the 2030s, surpassing even military spending. Paying for this debt has real consequences—more money spent on interest means less for social programs, infrastructure, and other investments. This could lead to tough choices, like cutting popular programs or raising taxes, both of which are politically risky. Rising interest rates also make borrowing more expensive, which could lead to a vicious cycle where the government has to borrow even more just to keep up with interest payments.
A History of Debt Levels
To understand how we got here, it helps to look back. After World War II, the Bretton Woods agreement made the dollar the world’s reserve currency, giving the US a huge financial advantage. Debt was high, but the post-war boom helped bring it down, as the economy grew faster than borrowing. In 1971, President Nixon ended the gold standard, removing the dollar's tie to gold and changing the global financial system. Without the limits of gold, the US could print more money, leading to a steady rise in federal debt. Over the years, different crises—from the oil shocks of the 1970s to the 2008 financial crisis and the COVID-19 pandemic—led to sharp increases in borrowing. Each crisis brought new spending to stabilize the economy, but also added to the debt. Today, the US faces historically high debt levels, with little agreement on how to handle it. Meanwhile, households are feeling similar pressures; the financial crisis left many families in debt, and today, high education costs have left millions of young people with student loans they may struggle to pay off.
The unstoppable growth of debt
The dollar’s value has steadily dropped for decades, partly because the government relies on debt to fund spending. Inflation has made everyday items more expensive, reducing the real wealth of average Americans. Government, businesses, and consumers are all more in debt, which paints a worrying picture of an economy that depends too much on borrowing. Easy credit has fueled spending, but it has also made the country more vulnerable to economic downturns, as people and companies struggle to pay their debts in tough times. During each crisis, the government has stepped in with bailouts and stimulus, adding more to the debt and creating a cycle of dependency. This cycle isn’t showing signs of stopping, and it raises important questions about whether the American economic model can last in the face of global competition.
Image: The total public debt of the US as of 2024, Peter G. Peterson Foundation
The Dollar's Role as a World Reserve Currency
The dollar’s role as the world’s reserve currency has allowed the US to build up a huge debt without facing the consequences that other countries might. In the past, empires that made their currency the global standard enjoyed big economic benefits, like being able to borrow cheaply and influence global trade. But these benefits came with risks—when their power faded, so did the value of their currency. The British Empire and the Dutch Republic both show that dominance doesn’t last forever, and the cost of trying to maintain it can become too much. The US could be in a similar position today, with the dollar still at the center of the world economy, but with weaker financial stability. If trust in the dollar fades, the US could face higher borrowing costs and lose economic influence, which would have huge impacts both at home and abroad. And as the government borrows more, everyday Americans are also falling deeper into debt, from mortgages to student loans, creating a situation where both the public and private sectors are stretched thin.
Modern Monetary Theory
Supporters of Modern Monetary Theory (MMT) say that the US can handle more debt without the same risks as households or businesses because it issues its own currency. They argue that since the US can always print more money, it can’t really go bankrupt, and that government spending is needed to keep people working and the economy growing. But critics of MMT point out that printing more money comes with consequences. Inflation is the biggest risk—if there’s more money but not more goods and services, prices go up.
There’s also the risk of the dollar losing value and investors losing confidence, which could destabilize the economy. If foreign investors lose faith in the dollar, they may want higher interest rates to balance the risk, making it more expensive for the US to borrow. The idea that debt doesn’t matter sounds less and less convincing when faced with rising interest rates, bigger repayment costs, and more global competition. At the same time, young people are already feeling the pressure of a debt-heavy economy, with many carrying student loans they can barely afford to pay back.
The Dollar as America’s Weapon and Asset
The US dollar is one of America’s most powerful tools, not just for the economy, but also for influence around the world. The term “exorbitant privilege,” coined by French President Valéry Giscard d'Estaing in the 1960s, refers to the US being able to print the world’s reserve currency, which lets it run bigger deficits without facing the same problems as other countries. Giscard d'Estaing used this term to describe the unique advantage the United States had due to the global use of the dollar, which allows the country to finance its deficits at relatively low costs compared to other nations. This gives the US a lot of leverage, as most world trade is done in dollars, and many countries keep large reserves of US currency. But this privilege isn’t guaranteed—it depends on the world continuing to trust the dollar as stable and reliable. As long as other countries, institutions, and investors trust the dollar, the US can keep spending more than it earns. But cracks in this trust are starting to appear, especially as other nations look for alternatives to the dollar and question whether the US can manage its growing debt. Losing this privilege would be a major blow, hurting both the economy and America’s position in the world. And as the government keeps borrowing, many American families are also relying on credit cards to make ends meet, creating a fragile financial situation that affects the country from top to bottom.
BRICS and the Challenge to American Hegemony
In recent years, BRICS (Brazil, Russia, India, China, and South Africa) has taken steps to challenge the dominance of the dollar and the American-led financial system. The recent BRICS summit in Kazan, held from October 22 to 24, 2024, highlighted the bloc's ambitions. Despite Western sanctions aimed at isolating Russia, the summit saw leaders and representatives from 36 countries, including the U.N. secretary-general, come together to discuss themes like "just global development and security." The Kazan declaration emphasized the need for a multipolar world and a fairer global financial system, reflecting BRICS' desire to create alternatives to the existing Western-dominated structures. BRICS also welcomed new members in 2024, including Iran, Egypt, Ethiopia, and the United Arab Emirates, further expanding its reach and influence.
The bloc's calls for a more inclusive financial architecture, as well as initiatives like the BRICS Grain Exchange and the cross-border payment system, show that it aims to reduce reliance on the dollar and weaken American hegemony over international finance. While BRICS is not yet a powerful alliance capable of reshaping the global financial system, its goals should not be dismissed. The bloc's emphasis on using local currencies in trade, developing a cross-border payment system, and creating a BRICS Clear depositary infrastructure all point toward a concerted effort to build a parallel financial system. For China and Russia, BRICS is clearly about countering U.S. influence, while for countries like India, it offers an opportunity to diversify economic and diplomatic options without fully aligning against the West.
If these trends continue, the US could lose financial flexibility just as its debt reaches record levels. As BRICS continues to grow and more countries consider joining, the bloc presents a significant challenge to the dollar's status as the world’s main reserve currency. The establishment of mechanisms like the BRICS Grain Exchange and efforts to create independent financial infrastructure are not immediate threats, but they represent incremental steps toward reducing the global reliance on the dollar. If the dollar’s dominance fades, the US will find it harder to finance its deficits, which could mean higher borrowing costs and less influence globally. This comes at a time when many Americans are already struggling with personal debt—student loans, credit cards, and rising living costs—adding to the sense that the economic foundation is becoming less stable.
Voices of Concern
Many American business leaders and policymakers are worried about the nation's growing debt and what it means for the economy. People like Warren Buffett and Ray Dalio have warned about the long-term risks of too much borrowing, saying the current path is not sustainable. The Congressional Budget Office (CBO) predicts that interest payments on the debt could become the biggest federal expense by the 2030s, even more than military spending. This would limit the government’s ability to invest in important areas like education, healthcare, and infrastructure. On top of that, higher taxes to pay for the debt could slow economic growth and make American businesses less competitive. According to the Brookings Institute, the federal debt cannot keep growing faster than the economy forever, as it would eventually crowd out private borrowing and drive interest rates higher. These scenarios aren’t just numbers on a page—they mean real consequences, like higher living costs, fewer public services, and less economic opportunity for future generations. The new generation is particularly vulnerable, as many are entering the workforce burdened with student loans and facing higher living costs, making it hard to build a stable financial future. The growing concerns from experts highlight the urgency of addressing this problem before it gets worse.
Source: Congressional Budget Office; Office of Management and Budget.
Conclusion
America's rising debt is a problem that can no longer be ignored. It risks not only undermining the country’s economic strength but also reducing its influence abroad and leaving future generations with an immense financial burden. Both Harris and Trump have avoided tackling this issue, instead focusing on short-term wins and popular policies rather than the long-term health of the country’s finances. Ignoring the growing debt will come at a cost—whether through rising inflation, increased taxes, reduced public services, or diminished global influence. America has all the knowledge and resources to learn from the past empires and systems and demonstrate that history can be a lesson and not something that we humans should repeat.
