If I were writing the State of the Union address this year, it would begin with a sentence every American deserves to hear plainly, specifically that the state of our economy is strong, but the financial state of our nation is not.
Those two truths can coexist. In fact, they do today.
Our economy continues to outperform much of the world. Growth persists. Unemployment remains historically low. Businesses are expanding. Markets are confident. By many traditional measures, the economic engine of the United States is the envy of developed nations.
AMERICANS ARE MOVING IN GREAT NUMBERS, AND SCRAMBLING THE ELECTORAL COLLEGE MAP
But beneath that strength lies a fiscal foundation that has quietly, steadily eroded for a generation.
For more than 25 years, Washington has accumulated deficits regardless of which party held power or who occupied the White House. This is not the fault of one president or one Congress. It is the predictable outcome of a political culture that rewards short-term promises and postpones long-term responsibility.
Today, our national debt stands near $39 trillion, much larger than the entire annual output of our economy. Our debt-to-GDP ratio is about 125%. This figure fails to include more than $100 trillion in long-term unfunded obligations tied to major federal programs. Within seven years, key trust funds are projected to be exhausted. These are not partisan talking points; rather, this is a mathematical reality.
We have faced daunting debt before. At the end of World War II, our debt ratio was also over 100%. But what followed was not endless borrowing. For roughly two decades, the country had a smaller government combined with restrained federal spending and responsible, balanced budgets. The result was rapid growth of the economy and a dramatic decline in debt relative to the size of the economy, down to less than half of national output. That is what sound economic policy looks like.
Today’s trajectory is the opposite. Current projections show multitrillion-dollar deficits stretching indefinitely into the future. Year after year, the gap widens. Every credible long-term forecast, including our own government, warns that this path is unsustainable. Credit markets have issued cautionary signals. Fiscal scholars across the ideological spectrum have sounded alarms. Yet Washington largely shrugs.
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If we continue ignoring these warnings, we are not merely postponing a problem. We are compounding it and handing the bill to our children and grandchildren. Leaving them with a nation buried in debt is not just imprudent. It is unjust and immoral.
So, what should a responsible State of the Union include instead?
The first is term limits for members of Congress. Career politicians often become focused on the next election, not the next generation. When lawmakers remain in office for decades, they begin to think in terms of political survival rather than national stewardship. Term limits would change that focus and encourage fresh thinking, reduce complacency, and remind elected officials that public office is a temporary trust rather than a permanent entitlement.
The second challenge is the sheer size of our federal government. Washington has grown far beyond its core responsibilities as clearly spelled out by our Founding Fathers in the Constitution. Agencies multiply, regulations expand, and spending rises even when programs fail to deliver results. A government that tries to do everything eventually does nothing well. We must call for a disciplined review of federal functions with the goal of returning many responsibilities to states, communities, and the private sector, where innovation and accountability are stronger. This is what was clearly intended in Amendment 10 to the Constitution. Our Founders always intended the federal government to be limited.
Third, we must confront the unsustainable trajectory of our entitlement programs. Social Security, Medicare, Medicaid, and other commitments were created with good intentions, yet demographic reality has changed dramatically since their founding. In many cases, the unelected bureaucracy has gotten the incentives so backward, the results are the opposite of what was intended. Without reform, these programs will consume a larger share of federal spending and push our debt to levels that can never be financed. Responsible reform does not mean abandoning promises for the truly needy. It means adjusting them so they can be kept.
Finally, we must address our tax system. It is complicated, inefficient, and filled with distortions that reward special interests instead of encouraging growth. A simpler system with lower rates and a broader base would promote investment, expand opportunity, and generate more stable revenue.
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We must address these issues today while there is still time. That window is closing fast. And we need to pass a constitutional amendment for fiscal responsibility to make our changes permanent.
That, ladies and gentlemen, is the financial state of the union, and the speech that we need to hear.
Les Rubin is the founder and president of Main Street Economics.