Our $40,000,000,000,000 Debt

The United States national debt has reached $40 trillion — roughly $116,000 per American. That number is now approximately equal to the size of the entire U.S. economy, meaning the country's debt is, in a sense, "another America." But as economist Jared Bernstein explains, that headline figure may be a distraction from what actually matters: whether the debt is growing faster than the economy can sustain, and whether the political system is capable of stopping the slide.

The framework that kept economists calm — and why it broke

For decades, a significant portion of mainstream economists, including Bernstein, argued that large national debt was manageable as long as interest rates stayed low and the economy grew faster than debt service costs. Bernstein uses a bathtub metaphor: the debt is the water already in the tub, while the annual deficit is the water flowing in. As long as the economy grows faster than the interest payments on that water, the country can service its debt without a crisis. "Underlying economic growth can allow you to service that debt without breaking a big economic sweat," Bernstein says. This was the consensus that allowed policymakers to avoid painful choices for years.