This week, President Trump is in Asia, negotiating trade and security deals that he hopes will keep America atop the world order.
We know China, Russia, and other adversaries want to knock us off our perch, but our greatest threat is much closer to home.
America’s national debt is now so big, and growing so fast, that we are headed for a historic debt crisis.
One day soon, the citizens, companies, institutions, and other countries that lend money to the U.S. by buying our Treasuries could wake up and ask: “I wonder if America will actually pay me back in full?" Once they do, they will demand much higher interest rates to lend to our government, and financial Armageddon comes for all of us.
Imagine your 401(k) falling 20% in a day. Envision banks failing, millions of job losses and panic in the streets.
It would be comforting to think our leaders would never let this happen – but let me ask you something.
The federal government has now been closed for 29 days. Our leaders literally cannot keep the lights on.
Do you have any confidence that they have the capacity to proactively address a national debt that has now reached $38 trillion?
I do not.
That is why No Labels is developing a Break Glass rapid-response playbook that Washington could deploy in the event of a U.S. debt crisis. We have already started to share ideas in discussions with some of our allies in Congress and we plan to release this policy document early next year.
Although No Labels is the first to suggest this idea, we hope we won’t be the last and we invite policymakers and think tanks alike to also start developing contingency plans for a debt crisis. What do you think?
Do you think contingency planning should be happening in our government for a potential fiscal crisis?
If you want to understand how bad our current debt problem is and how we got here, check out this quick primer from the No Labels policy team.
When it comes to the national debt, much of Washington is consumed by magical thinking. They either ignore it, or hope that leaders will eventually come to their senses to address the problem before it’s too late. At No Labels, we will certainly root for and support any leaders with the courage to try.
But we see no signs of this happening, and we do not believe hope is a strategy.
We expect a debt crisis in the United States in the coming years. If no one does the planning now, Washington will stumble into a debt crisis and make rushed, reactive, and bad decisions that consign our kids and grandkids to a darker future.
The purpose of Break Glass is to:
1) Get Americans focused on why a debt crisis could be coming, how it could unfold, and how it would impact American families. No Labels has already been consulting economists, former Federal Reserve officials, financial leaders, and budget experts, so we can paint a vivid picture of what happens to America – and to you – in the days and weeks after a crisis.
2) Clarify the choices for our leaders. Most discussions about the national debt quickly devolve into “eat your spinach” accounting exercises focused solely on cutting spending or raising revenue from existing government programs or policies. We need to think bigger. The time is now for leaders to prepare a plan that does not just balance the books of the government we have. We need to reimagine and reinvent the government we need for the 21st century.
Break Glass will not be like other debt reduction plans you may have seen in the past, many of which come from bipartisan committees that take months or years to develop smart, sensible policy recommendations. But the nature of a debt crisis is a government does not have the luxury of time to respond.
A debt crisis demands action and leaders need to instantly understand the precise nature of our fiscal problems and the choices they have available to solve it. That is what Break Glass will aim to achieve.
It is time to get Americans and our leaders focused on a national debt problem that is on its way to becoming the most predictable crisis in American history.
We know exactly where this is headed.
You can expect No Labels to have a lot more to say on America’s national debt in the coming weeks and months and on the urgent need for our Break Glass rapid response plan.
