Here are three things we all need to know about America’s debt and why it’s such a serious problem. • America’s total national debt is over $32 trillion and our debt as a share of our economy has not been this high since World War II. Our overall debt-to-GDP ratio is 120 percent and it is getting worse by the day. From America’s founding in 1787 until 2008, we accumulated $10 trillion in debt. In the 15 years since, we have accumulated another $21 trillion. — • Over 70 percent of all federal spending is “mandatory” spending, which refers to programs like Social Security, Medicare and Medicaid, and interest payments on the debt. These are ongoing obligations the government is legally required to pay every year. The remaining 30 percent is “discretionary” spending—for every other priority the government spends money on, like defense, education, medical research, agriculture, and the environment—that Congress has to appropriate each year. When you see Congress fighting over the budget and members threatening government default or a government shutdown, they are usually fighting over the 30 percent of the total budget allocated to discretionary spending while ignoring the 70 percent devoted to mandatory spending. — • Washington is now paying $400 billion in interest annually, which is more than it spends on food and nutrition, housing, higher education, science, space, and technology combined. If current trends hold, 40 percent of all federal revenues—in other words, your tax dollars—will go toward interest payments within the next 30 years. Federal spending has grown exponentially since the onset of the COVID-19 pandemic, spiking almost 50 percent in 2020 compared to the year prior and remaining above six trillion dollars annually ever since. Many economists believe this spending is at least partly responsible for the inflation that is hurting so many American families because it has significantly increased the demand for goods and services. Washington doesn’t need to immediately balance the budget every year, because the required spending cuts or tax increases would be more than our economy could handle and more than most Americans would accept. But Washington does need to get a handle on our finances so our debt doesn’t continue to get bigger as a share of our economy, which could put us in a fiscal hole from which we could never dig ourselves out. America’s debt is so big, and the burden of it is so serious, that there may only be two ways to meaningfully address the problem. A STATUTORY DEFICIT REDUCTION COMMISSION In 2010, the White House created the bipartisan Simpson-Bowles Commission on Fiscal Responsibility and Reform, which produced a report laying out a long-term vision for stabilizing America’s finances through a mix of modest spending cuts and revenue increases. The report was sensible and responsible, and dead on arrival. The White House and members of Congress from both parties could not distance themselves from Simpson-Bowles fast enough. Politicians are smart enough to know that most policy ideas—especially most deficit reduction ideas—never become law. And they did not want to go on the record to support the kinds of revenue increases or spending cuts that would give their opponents easy fodder for attack ads. The problem with Simpson-Bowles was in its design, namely that Congress was not required to vote on it. That’s why the next president should call on Congress to appoint an independent and bipartisan deficit reduction commission—which could include current members of Congress, as well as respected outside experts—that would be tasked with forming a deficit reduction plan that Congress would have to vote on in its entirety, meaning members of Congress could not offer amendments to change it. Without these guardrails, members of Congress would inevitably kill any deficit reduction plan with “poison pill” amendments that feature politically toxic provisions that would make it impossible for a majority of members to support the plan. America simply will not solve our debt problem unless Washington is forced to do so with a process that requires Democrats and Republicans to develop a plan that puts everything on the table—from what and how we spend to what and how we tax. GET AMERICA'S ECONOMY FIRING ON ALL CYLINDERS From 1947 to 2003, America’s economy grew at an average of 3.5 percent each year. For the last 20 years, it has grown at only 1.9 percent per year. If the US economy started growing closer to the rate we saw in the 50 years after World War II, it would create trillions in additional tax revenue and make every budget problem we have easier to solve.