According to the latest available numbers, 77% of Americans carry at least some debt, with the average American owing a little over $100,000 to credit card companies, personal loan providers and mortgage companies.
We’re a country of folks used to owing others money, and a massive industry has grown around debt — collection agencies, consumer credit monitoring agencies and the host of software and apps that accompany our inability to spend within our means.
Most Americans are fine with this. According to the National Foundation for Credit Counseling, 64% of Americans are “comfortable with their level of unsecured debt.”
But as much as most Americans are okay with personal debt, a majority of Americans don’t like our nation to be in the red. Pew reports that 57% of Americans say that reducing our national budget deficit should be a top priority in 2025. Most Americans don’t like that our national debt is so close to $35 trillion.
Why are Americans not concerned with personal debt, which in the U.S. totals $17.8 trillion, and so focused on the government’s unbalanced spreadsheet? Especially when personal debt carries a much higher risk than the national debt ever will?
Get to work!
Don’t worry too much: The incoming administration is on the case! The newly-minted Department of Government Efficiency exists to cut $2 trillion from the government’s 2025 budget, ensuring the first surplus since 2001 and teaching all Americans a lesson in frugality.
But one of the department’s leaders, in an interview with Mark Penn broadcast on X, recently noted that $2 trillion is a “best-case outcome,” and that the organization had a “good shot” at maybe cutting $1 trillion.
The incoming administration suddenly seems to be on a dedicated campaign to lower everyone’s expectations now that the election is over. Even the president-elect recently admitted he couldn’t bring down food prices, and now one of his Efficiency Bros is admitting that the national deficit won’t be dealt with as easily as previously imagined.
And it’s not like the soon-to-inaugurated president has plans to extend his tax cuts, adding $4.6 trillion over the next ten years, right? Or like he’s asked Congress to completely eliminate the debt ceiling on his behalf?
I remember a time when Republicans rhetorically cared about the national debt. So many politicians and pundits on the right waxed rhapsodically about profligate liberal spending — despite the fact that every Republican administration since Eisenhower has left office with a deficit.
Easier than puttin’ up a fight
The truth is that our national debt carries a lot less risk than our personal debt. The U.S. dollar remains strong as the currency of international trade, and despite ranking below the Swiss franc and Japanese yen in stability its value against other currencies is up over the last decade.
There is the possibility of inflation, of course. But the Biden administration is handing its successor the strongest economy in the world, with a GDP of over $27 trillion and consumer prices leveling out. The return of a man whose companies have declared bankruptcy six times will be a good test for the economy of the United States. But I believe in our resilience.
During the financial crisis, there was an expression that was thrown around often regarding certain financial institutions, “too big to fail.” The U.S. government falls into this category to some degree. The work most Americans do and the projected value of American endeavors are enough to cover whatever our country overspends or borrows.
But the average American worker doesn’t have the same luxury. Any form of bankruptcy can be devastating to an individual or family, harming credit scores and the ability to secure future loans. This would not be an issue if debt weren’t necessary to live here. Americans depend on borrowed money to maintain the lifestyles they prefer.
It’s the hard-knock life
And maybe therein lies the rub. Many of us are comfortable owing money as long as we see the immediate returns — the nice house and other material signs of success. Government spending is too abstract, too big to imagine, too unwieldy to see how all of it improves our lives. And that makes it easier to criticize, instead of making sense of our own profligate ways first.
A week before the election, I stopped to get some new windshield wipers at an auto parts store where I struck up a conversation with a woman from Shaler. She casually mentioned that she spent over half her monthly paycheck on a lease for her “amazing” truck. I looked out the window. It was a nice truck.
Moments after our chat, a political ad blared on the radio, discussing the economy.
“We really need to do something about government spending,” she said. “It’s getting out of control.”
Adriana E. Ramírez’s previous column was “Little ditty 'bout the H-1B visa.”
First Published: January 13, 2025, 9:01 p.m.