Don’t panic about the national debt — the US has the wealth to handle it

The U.S. national debt recently passed $40 trillion, hitting this monstrous milestone months ahead of Congressional Budget Office projections, in part due to tariff refunds increasing the total deficit.  

In March, the federal debt held by the public reached the size of U.S. annual gross domestic product, nearing its all-time peak from more than 80 years ago, when we were paying off World War II.

These headlines have renewed calls for austerity, but the truth is, America is nowhere near broke. On the contrary, the nation holds a staggering amount of wealth — far more than the debt it owes. The real question is not whether we have the resources to manage the debt, but whether we have the will to use them. 

Panic about the nation’s finances rests almost entirely on one number that is ubiquitous in economics: debt as a share of GDP. That metric is useful, especially when comparing countries over time. However, it is not the only number that matters, and on its own, it does not give us the full picture.  

GDP measures what the country earns in a single year, while the national debt accumulates over generations. Judging one against the other is like a bank deciding how large a mortgage a family can afford by looking only at a single month’s paycheck while ignoring the family’s second home, multiple cars and a sizable retirement account. No careful lender........

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