16 April 2021

 

President Joseph R. Biden, Jr.

The White House

1600 Pennsylvania Avenue NW

Washington, D.C. 20500

 

Dear Mr. President,

 

My name is Evan Stern, and I am currently a student at the University of Michigan in Ann Arbor, Michigan. To begin, I would like to offer my congratulations on a smooth and successful start to your first term in office. I wish you and your administration the best of luck in the four years ahead.

 

I am writing today to bring your attention to a matter that warrants the utmost concern. I commend you on the swift actions taken by your administration to deliver aid to struggling Americans and support the economy in the midst of the COVID-19 pandemic. Leading experts like Federal Reserve Chairman Jerome Powell acknowledge that the economy has improved substantially thanks to relief packages like the American Rescue Plan you signed into law last month (National Public Radio). However, while our economy appears to be heading in a promising direction, these assessments completely disregard the growing amount of debt held by the United States federal government. According to current figures, the U.S. currently holds nearly $28.2 trillion in total debt, which equates to almost $225,000 per American taxpayer (U.S. Debt Clock). As it stands, the total national debt has climbed to such high levels that it equaled roughly 130% of total gross domestic product at the end of fiscal year 2020 (The Balance). This is over one and a half times the 77% threshold for concern set by the World Bank.

 

The national debt has been swelling for decades, although the problem has markedly worsened in recent years. At the beginning of the current century, the total national debt was a mere $6 trillion. But policies aimed at curbing the impacts of the Great Recession of 2008 (Federal Reserve Bank of St. Louis), as well as the lack of regard for the debt from the Obama and Trump administrations, have made the debt explode nearly fivefold in only two decades. While I support a number of your policy actions and your vision for America, your administration is forecasted to exacerbate the problem even further, as recent CNN reporting affirms. Already, in the three months since you took office, your administration has passed a sweeping $1.9 trillion stimulus package to alleviate the current economic crisis (CNBC). Afterward, you moved on to unveiling an ambitious $2 trillion infrastructure plan (The White House). The Department of the Treasury reported that the U.S. budget deficit grew in March to almost $660 billion, “the third-highest monthly deficit ever recorded,” according to Market Watch.

 

Most economists agree that your decision to support economic relief measures was warranted given the severity of the economic downturn. At the same time, however, passing this massive government spending without a sound plan to reduce the national debt moving forward is deeply worrisome. While a pandemic might not be the time to actually implement measures to reduce the federal debt, it is certainly the time to discuss doing so. When the public health emergency ends, your administration must take swift action on the deepening debt crisis.

 

There are many reasons why the enlarging national debt is profoundly concerning. The actions of your administration as well as your predecessors are equivalent to “kicking the can down the road.” Presidential administrations as well as Congress have repeatedly put off addressing the national debt, which may very well prove detrimental for our country one day. Millions of American college students like myself depend on current leaders to make fiscally-responsible decisions in order to ensure robust economic growth, abundant job opportunities, and a government that can support us as we age. According to the Committee for a Responsible Budget and numerous other credible groups, the current trajectory of the national debt presents major consequences. First and foremost, the path of the national debt without a plan to address it means that the federal government will be forced to sacrifice national savings and income. As the debt grows, paying it off and the interest it generates continues to be one of the greatest sources of government spending (Mercatus Center). In fact, once interest rates rise from their current level, which is quite low, the federal government will be forced to devote a tremendous amount of money simply to servicing the debt (Salem News). This will serve only to divert spending away from programs and initiatives that benefit the American people, which will irreparably harm the country. At a future point, the federal government may have to scale back programs like Social Security benefits for aging Americans, which will be my generation one day. The current economic trends put people of all ages in danger.

 

The risks of the deepening national debt go far beyond these. As the debt grows, it is plausible that our federal government will be less capable of responding to crises like the current COVID-19 pandemic. The national debt was at a level low enough that Congress was able to pass generous stimulus packages for the American people to fend off the current economic downturn. However, this won’t be the case for future crises if the current deficit trends continue (Committee for a Responsible Federal Budget). Beyond this, one of the gravest risks of the exploding national debt is a higher probability of a catastrophic financial crisis. While unlikely in the current moment, a higher national debt presents a greater risk that the U.S. will default on its debt. A debt default would be a financial crisis whose impact would ripple across the country. If our government were to default on its debt, which only becomes more likely as the national debt rises, businesses and ordinary people would all suffer from higher interest rates. The stock market would fall markedly almost immediately due to investors flocking to other countries with safer investments (The Balance).

 

Fortunately, there is much your current administration can do to change the trajectory of the national debt, but that work must start immediately. I urge you to recognize the dangers of the national debt and do as much as possible to contribute minimally to its growth. While the debt presents profound risks and challenges, its dangers can be reduced if the problem is handled responsibly. As the current president, I strongly suggest you build a plan to lead our country out of this crisis. This plan need not be implemented right away, but it is critical the federal government is prepared to address the ballooning national debt when the public health crisis subsides. While politically unpopular since they take money out of the pockets of hard-working Americans, implementing responsible measures like raising taxes (which you have already proposed) and curbing spending will be good steps in the right direction (Investopedia).

 

I appreciate your time spent reading this letter. It is my sincere hope that you refuse to follow in the footsteps of previous leaders and recognize the great danger the deepening national debt presents. The cost of inaction is more than the United States can afford to risk.

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Sincerely,