When Ross Perot won an impressive 19% of the popular vote as an independent candidate for president in 1992, his main issue was the national debt. In one of his unusual, half-hour-long campaign ads, Perot declared, “Just this year, we ran up $341 billion in new debt…. That’s our legislators and our president trying to buy our vote, this year, with what used to be our money.”
Three decades later, our national debt—which reached $4 trillion the year that Perot ran—has hit $30 trillion. If our debt were to keep rising at that rate over the next 60 years, it would increase more than 50-fold and surpass $1.5 quadrillion (a quadrillion, which sounds like a made-up number, is a thousand trillions).
The portion of the national debt that really matters is the almost 80% that’s held by entities—whether foreign or stateside—other than the federal government. Such “debt held by the public,” which is fueled by deficit spending, has to be paid back to outside entities, whereas debt not held by the public merely involves intragovernmental transfers. Foreign holdings compose about a third of all debt held by the public. Japan and China hold by far the most (over $1 trillion each), some of which belongs to private investors and some to government entities. Put another way, China—an increasingly hostile world superpower—has more than $1 trillion of leverage over us.
It’s getting worse, fast. Our recent deficit spending has been truly historic. In 2020, based on official federal tallies (the basis for all figures in this essay), the federal government brought in $3.4 trillion in tax revenues and dished out $6.6 trillion in spending—so, for every $10 that came in, $19 went out. This lavish expenditure smashed the deficit record like New York’s Bob Beamon smashed the long-jump record in the 1968 Olympics. Beamon soared past the previous record—27 feet, 4-3/4 inches—to make an astounding 29-foot, 2-1/2 inch-jump. In similar fashion, with the deficit record sitting at $1.4 trillion, the federal government in 2020 spent a spectacular $3.1 trillion that it didn’t have. In 2020 alone, the government racked up more deficit spending than it had during the first 36 fiscal years of the postwar era (1947 through 1982), and that’s after adjusting for inflation.
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