The 2024 presidential election is over and Donald Trump is back in the White House. The Dow and S&P are celebrating, suggesting investors are optimistic about Trump’s impact on Wall Street.
But despite all the fanfare, we still face ominous challenges. This is the country’s unsustainable debt and deficit. No matter who wins, the path we’re on means everyone is in trouble unless something changes.
America’s debt recently exceeded $35.88 trillion, an amount that is almost incomprehensibly large. That’s a pile of $100 bills about the same size as the circumference of the Earth, or over 24,000 miles high. The 2024 federal deficit alone exceeds $1.83 trillion.
Year after year, we pass the bills on to future generations by operating on what feels like an infinite credit card, spending like a drunken sailor on our limitless credit limit, leaving future generations to wake up with the hangover of our reckless binge eating.
Oddly enough, it was Donald Trump who said in 1999 that he would solve this very problem. In his book “The America We Deserve,” President Trump offers ideas for putting America on a more sustainable path.
Of course, his proposal wasn’t great (in fact, in my opinion, it was kind of bad). But President Trump’s message at the time was a rare public acknowledgment that our fiscal policies were reckless and needed reform. And to be clear, that was at a time when the national debt was under $6 billion and we were headed for several years of surpluses.
Now he has a golden opportunity to face the debt crisis head on. Trump’s second term frees him from the usual political pressures. He personally doesn’t have to worry about re-election, pleasing donors, or maneuvering through general political calculations. He may make difficult choices that others may be ashamed of.
He can do things that he claims to be excellent at – actions that people who grew up in the swamp reject. If he steps forward, he could truly save America from what could be one of its most serious long-term threats.
This requires sacrifice. He can help Congress push for changes that could put the country on a more secure financial footing. This will require changes to tax rules, painful spending cuts, and reform of entitlement programs. Everything must be considered. Many of these changes are unpopular.
In today’s polarized political climate, these actions are so divisive that politicians rarely even discuss them. But this is why Trump can get this done. He has never shied away from controversy or backlash. If ever there was a need for someone willing to create division and break the golden calf, now is the time. Trump may be the man who wants to slaughter a sacred cow for both parties and put us on a more sustainable path.
Trump’s election victory will be even more meaningless if he leaves office in four years without solving our debt and deficit problems. Without bold action now, we are on a path to economic instability. Trump has the opportunity and responsibility to help us get off this cliff. Here’s hoping he’s willing to take the leap.
Jeff Hoopes is Professor of Public Policy and Thomas Willis Lambeth Distinguished Professor of Public Policy at the University of North Carolina, and Director of Research at the UNC Tax Center. He is a Certified Public Accountant in Colorado.
