Debt is America’s Greatest Threat

Last fiscal year, the federal government paid more than $970 billion in interest on America’s $39 trillion+ national debt.

The Claremont Institute’s William Voegeli blamed government profligacy on the left: “[L]iberals sell the welfare state one brick at a time, deflecting inquiries about the size and cost of the palace they’re building[.]”

However, the Congress’s infatuation with spending, and America’s resulting debt problem haven’t been limited to liberal Democrats. Government spending didn’t shrink during the Reagan years or following the Republican wave elections of 1994 and 2010.

Furthermore, according to July’s Monthly Treasury Statement, federal spending is running $172 billion ahead of last year.

There are decades of bipartisan government brickwork to be demolished.

Although reforming Social Security, Medicare and public welfare is essential, doing so will be difficult. However, on the hopeful assumption that there is time to dismantle government the same way it was built, incremental reduction of government to make it more efficient and less costly may be a more palatable start.

At least, that appears to be the approach President Donald Trump’s administration is taking.

According to the Government Accountability Office, fraud costs the federal government up to $521 billion annually. Some experts argue that fraud is far higher.

The provisional Department of Government Efficiency claimed to have saved $160 billion per year through its efforts to expose wasteful and fraudulent government spending, but much remains to be done.

In fact, the Trump administration has made combating fraud a priority by creating a national anti-fraud task force, expanding efforts to identify fraudulent benefit claims in Social Security, Medicare/Medicaid, EITC, and SNAP, among others, and increasing coordination among agencies.

Billions of dollars in fraud have already been uncovered in several states. More are in the crosshairs. Prosecutions have begun.

In addition, the Project On Government Oversight recently analyzed data from USAspending.gov, and, in a report, showed that over 74 percent – $712.6 billion – of $958.6 billion in domestic grant spending from fiscal 2024 couldn’t be tracked to the local leveI. In other words, once they reach states, the government does not know where hundreds of billions of grant dollars go. Accordingly, new rules have been proposed for federal grants.

The Trump administration is also working to cut the size and cost of government.

The American government has become so large that much of its civilian side has reached the point of negative returns: larger bureaucracies result in higher costs to taxpayers and consumers; rules and regulations bring greater intrusions into our lives along with more restrictions on our freedoms; and more costly regulation of businesses adds costs to the things we buy, and results in shortages of products and services.

The administration is requiring every department in every agency to make its case for funding, and is comparing the responsibilities of agency jobs to relevant private-sector equivalents to determine proper staffing and productivity standards.

In September 2024, the federal civilian workforce numbered 2,313,216. By January 2026, that was reduced, primarily through normal attrition, by 12 percent to 2,035,344, the lowest level since 1966 – with no decline in government services. Taxpayers save roughly $29 billion annually.

Functional reviews are ongoing. The Trump administration has begun the process of dismantling the Department of Education, relocating at least a portion of the Ag Department closer to America’s breadbasket, and reforming energy policy.

On the plus side, income and payroll taxes are up 6 percent over last year, so, clearly, the economy is creating more and better-paying jobs, and Trump’s tariffs are up $55 billion so far this fiscal year. But spending is still increasing faster than revenues are growing.

Medicaid grants to states are up by $48.5 billion compared with last year; Social Security payments are $63 billion higher; Medicare is up $47 billion – and interest on the debt is running $78 billion ahead of last year.

Overstaffing, fraud and waste should not be normal conditions of government, however, the larger the government, the more likely all three become.

It will take a lot more cutting and economic growth to balance America’s books.

There is only so much the administration can do, and executives change. Oversight responsibilities reside and spending bills originate in the House of Representatives. There, more than lip service must be paid to controlling federal spending.

Speak out. Call your member’s office. Make your voices heard.

https://www.pottsmerc.com/2026/07/26/jerry-shenk-debt-is-americas-greatest-threat/