National Debt
With the new administration in place and past their first 100 days, we continue to see a moderate amount of clarity around what a second Trump presidency means for the country. A large focus has been on the deficit and reducing waste in the government, and rightfully so. In 2024, we unfortunately had a deficit of 1.8 trillion dollars in the US.
That is a lot of debt. Which means, Dave Ramsey and his team at Ramsey Solutions are not happy. To put that in perspective, there are 1,000 billion in a Trillion, and 1,000 million in a billion. The national debt currently sits at 36 trillion.
So, what’s the problem?
The problem is in the weeds. In 2024, the US generated $4.9 trillion in revenue. And the US spent, among other things, the following: Social Security $1.5T, Medicare $865B, Medicaid $618B, defense $850B, and Interest on debt $881 B. The total is $4.71 trillion in spending annually.
These items seem to be untouchable, and rightfully so. All but defense fall under entitlements, which are mandatory pieces of our spending. That is not good; we have $200 billion left for everything else, like transportation, natural resources, education, energy, agriculture, and space.
The point is that we cannot cut enough discretionary spending to get to a balanced budget. We must grow our tax income through economic growth, increase tax rates broadly in hopes that the extra tax revenue doesn’t come at the cost of economic development, or reduce defense spending.
Efforts in Trying to Fix the Debt Problem
There has been a recent push to remove excess government spending through DOGE efforts. They have found many areas of government that have waste and abuse, and have worked to correct these abuses. The goal is to balance the budget and eventually get to a point where we run a surplus, which hasn’t been done since 1998 under Clinton.
I believe DOGE's efforts have been somewhat effective in finding and eliminating waste. They are a great start; however, much like cleaning up personal finances, eliminating debt can be a long and painful process.
The national debt is now roughly 7.3 times our annual tax revenue. Let's say your annual take-home pay is $75k. The equivalent personal debt would be $547,500. The outlook isn’t good. But if you are disciplined, you can get things paid off. It would require additional jobs, side hustles, and lowering your spending, but it is possible (sounds a little like Gazelle Intensity for all the Dave Ramsey fans out there!).
This is the kind of approach we need to embrace as a nation if we are serious about reducing the national debt and securing long-term fiscal stability. While we haven’t yet seen comprehensive, solution-focused conversations that could realistically lead to a balanced budget, there is reason to believe such discussions are within reach. Entitlement programs and defense spending remain complex and sensitive issues, but with thoughtful leadership and bipartisan cooperation, progress is possible. Americans hold differing views on the role we play in global affairs and border protection, yet there is common ground to be found. The most promising path forward lies in strong, sustained economic growth that boosts tax revenues and reduces our reliance on borrowing. With innovation, responsible policymaking, and shared commitment to prosperity, we can meet this challenge head-on. The math may be tough, but so are we – and with the right momentum, a balanced budget is an achievable goal.
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The U.S. National Debt - Can it be fixed?
May 19, 2025
Jake Buckwalter
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