The 2024 presidential election is over and Donald Trump has returned to the White House. Dow and S&P are celebratesuggesting investors are optimistic about President Trump's impact on Wall Street.
But despite all the fuss, we still face the ominous challenge of unsustainable national debt and budget deficits. No matter who wins, the path we're on means we're all going to suffer unless something changes.
America's debt has recently exceeded $35.88 trillionan almost incomprehensibly large sum. It's a bundle of hundred dollar bills that's about the same size as the circumference of the Earth and more than 24,000 miles tall. The federal budget deficit alone in 2024 will exceed $1.83 trillion.
Every year, we operate on what feels like an unlimited credit card, passing the buck to future generations, spending like drunken sailors with unlimited credit, and allowing future generations to pay for us. I let myself wake up with a hangover from my reckless binge drinking.
Oddly enough, back in 1999, it was Donald Trump who was talking about solving this very problem. In his book, “America we deserve” President Trump proposed ideas to put the United States on a more sustainable path.
Admittedly, his suggestions weren't great (actually kind of bad, in my opinion). However, President Trump's message at the time was an unusual recognition from a public figure that our country's fiscal policy was reckless and needed reform. And let me be clear, that was when the national debt was below. 6 billion dollars The company ended up running a deficit and a surplus for several years.
He now has a unique opportunity to confront the debt crisis head-on. President Trump's second term will be free from the usual political pressures. He personally doesn't have to worry about re-election, donor favor or the usual political calculation maneuvers. He can make difficult choices that others might shy away from.
He can do what he claims to be good at, actions that people who grew up in the swamp would refuse to do. If he takes action, he could truly save America from what could be one of its most serious long-term threats.
This will require sacrifice. He could push Congress to make changes that would put the country on a more stable financial footing. This will require changes to the tax code, painful spending cuts, and reform of entitlement programs, all of which should be on the table. Many of these changes will be unpopular.
In today's polarized political environment, these actions are so divisive that they are rarely even discussed by politicians. But that may be why Mr. Trump is able to pull this off — he has never shied away from controversy or backlash. If ever we needed someone willing to disagree and break golden calves, it's now. Trump may be just the kind of person who can slaughter sacred cows on both sides and set us on a more sustainable path.
If Trump leaves office within four years without addressing the debt and deficit problem, his electoral victory will be significantly less meaningful. If we don't take bold action now, we will be on a path to economic instability. President Trump has an opportunity and a responsibility to help us get off this cliff. I hope he is willing to take the leap.
Jeff Hoopes is a professor at the University of North Carolina, the Thomas Willis Lambeth Distinguished Chair in Public Policy, and director of research at the UNC Tax Center. He is a certified public accountant in Colorado.
