AIER Explainer Series Demystifies Public Debt

– August 21, 2024 Reading Time: < 1 minute

AIER just launched its new Explainer paper series, helping the everyman make sense of complicated economic topics. The first Explainer, Understanding Public Debt by AIER Research Fellow Thomas Savidge and Senior Research Faculty Ryan Yonk helps readers understand why there are unsustainable levels of government debt at the federal, state, and local levels and how to fix the problem.

The Explainer finds:

Government debt is a burden on future generations. Debt-financed spending provides government spending today but pushes tax increases on future taxpayers.
The National Debt, at an all-time high of $35.18 trillion, is just the tip of the iceberg. Social Security and Medicare have an additional $78.2 trillion in unfunded obligations.
If the federal government defaults on its debts, we could see massive tax increases, weaker economic growth, and rising inflation.
State and local governments owe $4 trillion in debt and another $8 trillion in unfunded liabilities for public pensions and benefits.
If state and local governments default on their debts, we could see fiscal crises reminiscent of the Eurozone Debt Crises of the early 2010s.
The debt problem is a spending problem, not a revenue problem. Research shows that raising taxes covers barely a fraction of the outstanding debt.
To fix spending, constitutional constraints are needed to limit government spending at all levels and nudge policymakers to make cuts and properly prioritize spending.

Read the full paper here.

Ryan M. Yonk is the Director of Educational Programs at the American Institute for Economic Research. He holds a PhD from Georgia State University and a MS and BS from Utah State University. Prior to joining AIER he held academic positions at North Dakota State University, Utah State University, and Southern Utah University, and was one of the founders of the Strata Policy. He is the (co) author or editor of numerous books including Green V. Green, Nature Unbound: Bureaucracy vs. the Environment, The Reality of American Energy, and Politics and Quality of Life: The Role of Well-Being in Political Outcomes. He has also (co) authored numerous articles in academic journals including Public Choice, The Independent Review, Applied Research in Quality of Life, and the Journal of Private Enterprise. His research explores how policy can be better crafted to achieve greater individual autonomy and prosperity.

Thomas Savidge

Thomas Savidge is a Research Fellow at the American Institute for Economic Research. He earned his Master in Public Policy from George Mason University and a Bachelor of Arts in Political Science and Philosophy from SUNY New Paltz.

Prior to joining AIER, Mr. Savidge was a Research Director at the American Legislative Exchange Council focusing on tax and fiscal policy. He was a co-author of several publications focused on public pensions, public retiree benefits, bonded obligations, tax and expenditure limits, and state taxes. In 2020, Mr. Savidge published a peer-reviewed study on Tennessee public retirement systems with the PERI Center at MTSU titled, “Tennessee Public Pensions: A Model for Reform.”

Mr. Savidge has also written articles published in The Wall Street Journal, The Orange County Register, Taxnotes, The Washington Post, US News & World Report, The New York Post, and The Daily Caller.