How to survive a national debt scare

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$40 trillion in national debt isn’t automatically a crisis. We should still be worried.

The national debt hasn’t been a major issue in the 2026 midterms. But perhaps it should be. As of last month, the United States is in debt to the tune of $40 trillion. That’s 12 zeros, which averages out to about $116,000 per American.

It’s enough that even economists like Jared Bernstein, the chair of the US Council of Economic Advisers under President Joe Biden, is starting to worry. Bernstein has long argued that the national debt is nothing to worry about too seriously as long as servicing it — that is, paying the interest on it — remains manageable.

Bernstein has since changed his tune. He told Today, Explained co-host Sean Rameswaram after last month’s debt milestone that while the number itself is “a big distraction,” two factors have him worried: Congress’s inaction and rising interest rates. But is it well and truly time to panic? Are we in a moment of no return?

Below is an excerpt of Sean’s conversation with Bernstein, edited for length and clarity. There’s much more in the full podcast, so listen to Today, Explained wherever you get podcasts, including Apple Podcasts, Pandora, and Spotify.

A lot of the economic work on the national debt involves forecasting, predicting where things are going. And nobody can really forecast things like interest rates or when there’s going to be another recession or a war or a pandemic, so nobody could honestly answer that question with, “I’ve been right about everything.”

But I feel good in the sense of being intellectually honest about how I’ve thought about this. When the numbers were pointing to a level of calmness about our fiscal outlook, even though lots of people had their hair on fire, I didn’t go there. I was pretty adamant that there wasn’t anything to be overly worried about at this point, for reasons that we can get into.

When the numbers changed, and the outlook changed, and the politics changed, I changed.

Let’s start with why you thought it was okay to carry loads of debt in the first place, because that was your position for some time, right?

Correct. When you say loads of debt, the important thing is not just this load of debt or the stock of debt. Think of the debt as the water in the bathtub and think of the flow. Every year, you get a deficit or a surplus. That’s the water coming into the bathtub.