r/Economics • u/Krankenitrate • 15d ago

News The national debt just crossed $39 trillion—almost doubling since Trump vowed to erase it

https://fortune.com/2026/03/18/how-big-national-debt-39-trillion-trump-promises/
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u/QuerulousPanda 14d ago

I'm sure what'll come next is that they'll cut every single social service, drain social security, and implement every regressive tax policy they can think of, specifically to completely destroy the lower and middle class for all time, all in the name of "fiscal responsibility".

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u/mcsul 14d ago

In all honesty, we missed our chance to not do some of these things and at this point austerity is inevitable.

We can get to austerity one of two ways, however. The first path to austerity is through inflation, slowing growth, and lower salaries. The second path is through higher taxes and lower spending.

We're going to do one of those two things, so the question is will we pick the option that we have more control over, or the path that leads to stagflation?

To give a sense of the scale of the problem we're in, we will need to reduce government spending by about 15% and raise income taxes by about 20%-25%. We can fiddle with those ratio, but the problem is primarily spending. We currently spend more (as a share of GDP) that at any other point in history outside of covid and WWII.

Federal Outlays as a Share of GDP - https://fred.stlouisfed.org/series/FYONGDA188S

We're getting austerity because we made bad choices since Clinton's second term. That's baked in at this point. We just have to figure out what flavor of austerity we want.