The United States is once again facing the prospect of defaulting on its debt.
This financial irresponsibility is inexplicable. The center of the global financial system must pay its bills. A default would be an extraordinary blow to U.S. power and prestige. It would undermine the faith in the U.S. dollar that is the cornerstone of America’s international status and do great damage to its national security. It would do great harm to other countries as well. It can all be avoided. It must be.
The U.S. has run up a national debt of $31 trillion, about 129% of its gross domestic product. Staggering though that sum is, it has fallen from the peak of 132.4%, reached in March 2021. That sum is not unsustainable; the International Monetary Fund estimates Japan’s national debt to be 264% of GDP and there is little concern about it.