forbes.com
US National Debt Reaches Record High Following Passage of One Big Beautiful Bill
The One Big Beautiful Bill has increased the US federal debt to over \$40 trillion, raising concerns about the debt-to-GDP ratio exceeding 124 percent. Historical precedent offers mixed outcomes, with some nations overcoming high debt through technological advancements while others experienced stagnation.
- What are the immediate economic implications of the One Big Beautiful Bill's passage on the U.S. national debt and debt-to-GDP ratio?
- The One Big Beautiful Bill has expanded Washington's balance sheet to a record high, exceeding \$40 trillion in federal obligations against a \$29.9 trillion economy. This could significantly increase the debt-to-GDP ratio beyond the 124 percent recorded in December 2024.
- How do historical examples of high national debt, such as post-WWII US and post-Napoleonic Britain, compare to the current situation, and what factors contributed to their differing outcomes?
- Historically, nations have overcome high debt-to-GDP ratios, such as the U.S. in 1946 and Britain after the Napoleonic Wars, through economic growth fueled by technological advancements. However, Japan's prolonged high debt demonstrates that this isn't guaranteed.
- What are the potential long-term consequences of the U.S.'s current fiscal approach, and what alternative monetary systems might mitigate the risks associated with unchecked debt accumulation?
- The U.S. faces a critical challenge mirroring the Western Roman Empire's collapse due to unsustainable fiscal practices. Continued reliance on money creation to finance public spending, as opposed to genuine borrowing and taxation, risks eroding confidence in the dollar and undermining long-term economic stability. This is exacerbated by the Cantillon effect, where benefits of growth disproportionately favor the politically connected.
Cognitive Concepts
Framing Bias
The article frames the US debt crisis as an existential threat, emphasizing the historical parallels with Rome's downfall. This framing, while dramatic, might exaggerate the immediate risks and overshadow more moderate perspectives on debt management. The repeated references to 'money printing' and 'politically connected elites' create a narrative that casts the current situation in a negative light, emphasizing potential corruption and mismanagement.
Language Bias
The language used is often charged and emotive. Terms like "money created out of thin air," "siphon off," and "economic suicide pact" are examples of loaded language that influence reader perception. While the author acknowledges being a techno-optimist, the overall tone leans towards pessimism and alarm.
Bias by Omission
The article focuses heavily on the US debt and its potential consequences, but omits discussion of potential solutions besides Bitcoin. While it mentions austerity and growth-focused approaches, it doesn't delve into specific policy proposals or international comparisons of debt management strategies. This omission limits the reader's understanding of the full range of available options.
False Dichotomy
The article presents a false dichotomy by framing the options as growth with inflation, austerity with a populist backlash, or Bitcoin adoption. It overlooks the possibility of a combination of strategies or other, more nuanced approaches to managing the debt.
Sustainable Development Goals
The article highlights how the current economic system, particularly the ability of those close to money creation to disproportionately benefit (Cantillon Effect), exacerbates inequality. This leads to a situation where GDP may grow, but living standards for the majority do not improve because the benefits are concentrated among a select few. This directly contradicts the SDG goal of reducing inequality.