The only solution to our $40 trillion debt problem is a value-added tax

News that the U.S. national debt has reached $40 trillion has produced the usual chest-thumping angst over what to do about it. Reduce spending. Cut Medicare and Social Security. Eliminate tax loopholes. Eliminate waste. Sorry, folks. Here’s why the solution has to come from the revenue side, not cost-cutting.

Start with the hardest number in Washington. Medicare costs about $1 trillion in fiscal 2026. Eliminate it entirely — as politically unthinkable as that is — and you close only about half of the current deficit. Social Security, at $1.7 trillion and rising every year, is even further off the table. Wipe out every domestic federal agency most people call “waste” — the EPA, the Department of Education, the State Department, foreign aid, all of it — and you’ve touched only 13–14 percent of the federal budget. There is no spending-cut path that closes this gap. The math forces the conversation onto revenue.

Here’s the full picture. The Congressional Budget Office’s fiscal 2026 baseline shows total federal spending of roughly $7.7 trillion. Of that, 73 percent, about $5.6 trillion, is mandatory spending set by law — no annual vote required — and covers Social Security, Medicare and Medicaid. Discretionary spending, the part Congress actually votes on each year, is roughly $2.0 trillion: about $900 billion for defense, about $1.1 trillion for everything else, “waste” categories........

© The Hill