The $40 Trillion Question: Can America Turn Debt Into Renewal?: History suggests that fiscal crises need not destroy nations — and America may be uniquely equipped to emerge stronger. (Lewis M. Andrews, September 5, 2026, American Spectator)
But it should also be remembered that a sovereign debt crisis is not a national death sentence. As Ray Dalio, founder of the hedge fund Bridgewater Associates, notes in his 2018 study of Principles for Navigating Big Debt Crises, there are many cases throughout history when the reforms needed to rescue a fiscally troubled country were not only enacted in time but actually produced significant economic and social improvements.
Fortunately for the U.S., some measures that could help trim federal spending have wide popular support. These include work requirements for Medicaid (estimated to save $32.6 billion per year), tighter screening of all entitlements for fraud ($233 to $521 billion per year), and a 10 percent across-the-board cut to all non-defense and non-entitlement discretionary spending ($73 billion per year).
Many left-wing groups are predictably fighting to preserve these expenditures, accusing reformers of everything from racism to greed. But as it becomes increasingly clear to voters that something must be sacrificed to keep the country solvent, they will clearly back the cuts most already accept.
Equally fortunate for the U.S. is that while its government added $29.8 trillion to the national debt after the financial crisis of 2007, the total value of all the country’s assets, public and private, simultaneously skyrocketed from $195 trillion to $513 trillion. In other words, America is currently worth nearly 13 times what it owes its lenders. Which means its credit is good enough that needed spending reductions can be stretched out to be less painful and even trimmed as an improving economy yields higher tax revenues.
But the country’s biggest advantage going into a financial crisis is that it is a remarkably diverse and technologically sophisticated society, which means that many spending cutbacks, while hard in the short run, will likely surface cheaper and even more beneficial alternatives. Something we read about all the time in business but is by no means unknown in the public sector.