{"id":5905,"date":"2026-01-18T19:07:55","date_gmt":"2026-01-19T03:07:55","guid":{"rendered":"https:\/\/abovecloud.xyz\/?p=5905"},"modified":"2026-01-18T19:10:29","modified_gmt":"2026-01-19T03:10:29","slug":"national-debt-is-already-killing-the-american-dream-says-top-economist-and-it-might-push-the-u-s-into-an-outright-depression","status":"publish","type":"post","link":"https:\/\/abovecloud.xyz\/?p=5905","title":{"rendered":"National debt is already killing the American Dream, says top economist\u2014and it might push the U.S. into an outright depression"},"content":{"rendered":"\n

The government\u2019s\u00a0$38.5 trillion national debt<\/a>\u00a0is suffocating the American Dream, a leading economist has warned, and if a highly debated debt crisis comes to fruition the country could be facing an all-out economic depression.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many factors have been blamed for the death of the American Dream. Most recently, it has been housing stock<\/a>, with President Trump moving to bar large Wall Street investors from buying up single-family homes. Elsewhere, JPMorgan CEO Jamie Dimon agrees that housing is a barrier but so is education<\/a>, saying opportunities need to be more accessible to young people across the country<\/a>.<\/p>\n\n\n\n

Meanwhile, the rising cost of retirement, raising children and running a car has led many to believe they can only achieve the lofty heights of the American Dream if they have\u00a0$5 million in the bank<\/a>.

However, many of these symptoms trickle back to the vast sum America owes to its debtors, according to Kurt Couchman<\/a>, a senior fellow in fiscal policy at thinktank Americans for Prosperity. In the final three months of 2025, the government spent $276 billion in interest on the debt<\/a>, which the likes of Bridgewater Associates founder Ray Dalio warn will one day squeeze out government investment <\/a>needed to bolster economic prosperity.<\/p>\n\n\n\n

In a Congressional testimony last month, Couchman told the\u00a0House Judiciary Subcommittee on the Constitution and Limited Government<\/a>\u00a0that \u201cthe\u00a0growing debt risks<\/a>\u00a0a bond market reckoning with potentially dire consequences for the American people. The actions of their representatives in Congress will determine whether the conditions of the American Dream\u2014peace, freedom, and prosperity\u2014survive, or if the future is decline.\u201d

<\/p>\n\n\n\n

Already, that future is being hampered, Couchman, author of \u2018Fiscal Democracy in America\u2019<\/em>, told Fortune<\/em> in a phone interview. The affordability crisis (inflation by any other name) was largely sparked by an \u201cexplosion\u201d in monetary supply at the onset of the pandemic, he outlined.<\/p>\n\n\n\n

\u201cWe\u2019ve already experienced the inflationary aspects of excessive federal spending and debt,\u201d Couchman, who previously worked in government addairs positions in the Committee for a Responsible Federal Budget, said. \u201cWe\u2019re now at the point where if you look at [the Congressional Budget Office], World Bank and [International Monetary Fund] and others, they say that once the debt burden achieves it surpasses a certain threshold of GDP that it starts to slow the economic growth.\u201d<\/p>\n\n\n\n

Economists aren\u2019t necessarily worried by the total level of debt (in fact, government debt is a necessary foundation of global markets). Rather it\u2019s the debt-to-GDP ratio, which measures a nation\u2019s borrowing against its growth. If this tips too far out of balance, growth can be hampered by the excessive amount of cash needed for interest payments.<\/p>\n\n\n\n

\u201cSo that means there\u2019s fewer opportunities,\u201d Couchman added. \u201cThe opportunities that are there aren\u2019t paying as well. Productivity is being suppressed.\u201d<\/p>\n\n\n\n

Is the worst-case scenario reality?<\/h2>\n\n\n\n

The worst-case scenario is a debt crisis. This is the moment at which the U.S. cannot find buyers for its debt and is either forced to rein in spending, agree to higher interest payments to secure loans, or significantly increase its money supply to lower the value of the repayments\u2014which comes with inflationary or hyper-inflationary effects.<\/p>\n\n\n\n

In this case, Couchman believes, the \u201clikelihood of having a recession, if not a severe recession or maybe even a depression, become possibilities.\u201d He added: \u201cThe global, economic instability could translate into some real security risks and even threats to our political systems because of the kinds of politicians that people may respond to if they\u2019re feeling especially desperate.\u00a0Those are all challenges to the American dream that stem from the growing debt burden.\u201d\u00a0

Many speculators argue that while national debt is a problem, it is not a crisis that will ever become a reality: After all, one could argue the U.S. is too big to fail, and has within its own power the ability to avert such a squeeze.

And yet, Couchman argues that while a recession is an inevitability (\u201cthey happen every five years on average, plus or minus a few years, so sooner or later we\u2019ll have one of those\u201d) America has a chance to avoid anything more sinister if it \u201clearn[s]] from the mistakes of others abroad or in the states before we get to that moment and turn the ship.\u201d<\/p>\n\n\n\n

A solution<\/h2>\n\n\n\n

There\u2019s no easy fix for the government\u2019s spending habits. At least, not a solution which will be popular, and as such, not one which elected politicians will be keen to put their neck on the line for. Because of this, the national debt issue is often described as a game of \u201cchicken\u201d with one administration to the next betting their successors will be the administration to address the poisoned chalice.<\/p>\n\n\n\n

There are many options to rectify the balance, the least popular being to pull back spending. More broadly, the federal government could adopt a set of budget-balancing \u201cfiscal rules.\u201d While a more palatable option, that also means it\u2019s less effective: According to an analysis from Oxford Economics of IMF data for more than 120 countries, on average, there\u2019s a 1.1%-of-GDP improvement in the primary balance in the three years up to and including adopting a fiscal rule. However, there\u2019s then a deterioration of the exact same percentage in the subsequent two years.<\/p>\n\n\n\n

Couchman\u2019s request is simpler: Transparency. The author and economist is making the same plea as Thomas Jefferson did to his Treasury Secretary more than 200 years ago, when he wrote<\/a>: \u201cWe might hope to see the finances of the Union as clear and intelligible as a merchant\u2019s books, so that every Member of Congress and every man of any mind in the Union should be able to comprehend them, to investigate abuses, and consequently to control them.\u201d<\/p>\n\n\n\n

\u201cThe most important thing Congress could do, to not only fix the budget but also restore democracy within Congress, is to do a real budget with all spending and all revenue in it so you can see everything,\u201d Couchman said. \u201cAll the committees will get to manage their portfolios, and you can have real discussions about trade-offs, what\u2019s more valuable, what\u2019s not, what we need to do, and what we can live without.\u201d

Reposted from Fortune News<\/p>\n","protected":false},"excerpt":{"rendered":"

The government\u2019s\u00a0$38.5 trillion national debt\u00a0is suffoc […]<\/p>\n","protected":false},"author":5,"featured_media":5906,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[1449,1286,1702],"class_list":["post-5905","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-usa","tag-american","tag-debt","tag-dream"],"yoast_head":"\nNational debt is already killing the American Dream, says top economist\u2014and it might push the U.S. into an outright depression - abovecloud<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/abovecloud.xyz\/?p=5905\" \/>\n<meta property=\"og:locale\" content=\"zh_CN\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"National debt is already killing the American Dream, says top economist\u2014and it might push the U.S. into an outright depression - 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