This video is part of our Kite & Key Shorts series — easy to understand ... but hard to forget.
Should Americans worry about the national debt?
As of 2021, the federal government has run up a $23 trillion credit card bill.i
That means that if we had to pay up today, every household in America would get a bill for more than $175,000.ii
And we’re on track to add another $112 trillion in debt over the next 30 years.iii
The main causes? Social Security and Medicare.
Why? Because these programs spend more on recipients than they take from taxpayers.
A typical couple on Medicare will get $3 of benefits for every $1 they paid into the system.iv
In fact, the entire increase in national debt over the next 30 years is projected to come from Social Security and Medicare.v
Finding a way to fix it…isn’t easy.
Tax the rich?
A 100% tax rate on incomes over $500,000 wouldn’t provide nearly enough money.vi
Cut the military budget?
Even reducing national security spending to $0 wouldn’t get us enough cash.vii
The only programs big enough to make up the difference are Social Security and Medicare themselves.
While we can save some money by running those programs more efficiently, it’s not nearly enough to close the gap.
Which likely means benefit cuts, tax increases that affect everyone — not just the rich — or, most likely, both.
Those are unpleasant choices, but the longer we wait to make changes, the more difficult they’ll become.
WHAT YOU NEED TO KNOW:
- As of 2021, we have $23 trillion in national debt — $175,000 per household.
- The main drivers of the debt are Social Security and Medicare.
- Even extreme measures like huge tax increases or abolishing the military aren’t enough to solve the debt problem.
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