As we go to press, the US government’s debt has reached $36.2 trillion and counting. That’s nearly 125% of the GDP in 2024—which means to pay it back completely, every American worker would have to work without pay for 15 months.
When the banks failed in 2008, the capitalist class faced a crossroads: allow a collapse that would immediately lead to mass unemployment and unrest, or bail the banks out on our backs. They chose the latter, which ballooned public debt and kicked the can down the road. Now, that crisis they delayed is catching up with them.
No bank lends money without receiving something in return: interest payments. The Congressional Budget Office (CBO) projects that the government will spend $952 billion this year on interest payments alone. That’s more than the budget for the military, Medicaid, veterans’ benefits, and for the first time, Medicare. The only larger expense will be Social Security.
In 2020, the government “only” paid $346 billion in interest. By 2035, the CBO projects this cost will rocket to $1.78 trillion.
To understand how deep a hole the government is in, let’s compare the debt to the past. Adjusted for inflation, the national debt was between $3 and $4 trillion in the 1970s. Spending started ramping up in the 1980s, and the debt rose with it—to about $15 trillion by 2008. Since then, it’s more than doubled.
Debt growth shows no sign of slowing down. The CBO projects that this year’s budget deficit will be $1.9 trillion. That means the government will spend $1.9 trillion more than it receives in taxes and other revenue—adding the same amount to the mountain of debt—all while maintaining tax cuts for the rich.
Between a rock and a Cybertruck
Debt growth shows no sign of slowing down. The CBO projects that this year’s budget deficit will be $1.9 trillion, adding the same amount to the mountain of debt. / Image: FiscalData, treasury.gov
Trump has launched a shock-and-awe campaign to reduce federal spending, inventing the Department of Government Efficiency and tasking Elon Musk to cut “waste and fraud.” At time of writing, DOGE claims it has slashed spending by $115 billion. Of course, their “wall of receipts” is riddled with errors. But even if their numbers are correct, the savings aren’t nearly enough—government spending is on the order of trillions. Take it from Jessica Riedl of the Manhattan Institute, a bourgeois think tank:
Think of Congress and its budget as the debt-ridden dad on the way to buy a $250,000 Ferrari on the credit card, and DOGE is the $2-off gas card he used along the way.
The debt crisis goes way beyond waste and fraud. The Ferrari in the metaphor is military and social spending—and there’s no way Trump is going to touch the war budget.
Budget crisis
House Republicans passed a budget bill that allows $4.5 trillion in tax cuts, while cutting only $2 trillion in spending over the next 10 years. That’s a massive deficit from the so-called party of “small government!” No wonder their 2024 party platform said nothing about the debt.
On the campaign trail, Trump promised not to cut Medicare or Medicaid. But the budget bill promises to slash Medicaid—a healthcare program over 70 million Americans rely on—by $880 billion.
Medicare, Medicaid, and Social Security are considered a political “third rail”—if you touch it, you get electrocuted. Only 17% of Americans support cuts to Medicaid, and more than half say they have a family member who has used it.
Many “red” states have relatively high Medicaid enrollment. Take it from reactionary ideologue Steve Bannon, “Medicaid, you gotta be careful. Because a lot of MAGAs are on Medicaid, I’m telling you. If you don’t think so, you are dead wrong.”
Indeed, potential cuts to government health programs come in the context of a nationwide healthcare crisis. That’s why tens of millions of Americans—including many of those MAGAs—sympathize with Luigi Mangione, the man accused of gunning down a healthcare CEO.
Austerity will provoke class rage
There’s no legislative trickery that can fix the deficit. The only way the ruling class will get anywhere near to balancing their books is by cutting social spending. And that will provoke more expressions of class rage.
In 2018, Democrats won the House by pointing to the Republicans’ threats to cut Obamacare. Now, some liberals are already pouncing on the opportunity to score points on Medicaid cuts. In the absence of a workers’ party, the Democrats may see a boost.
If the labor movement chose to run just a few independent candidates, they could appeal to working-class anger at austerity and make a serious splash—especially if they called for revolutionary demands like nationalizing the healthcare industry under workers’ control. But even if the labor leaders won’t step up, the Revolutionary Communists of America will be on the frontlines fighting against austerity—and building a party to take down this rotten system once and for all.