No one knows who first suggested that politicians should frame the national debt as a bill to be paid by America’s newborns. Or perhaps someone does. It doesn’t matter. What matters is that this trope — that the debt is appropriately measured in bills handed to infants — has become one of the hoariest tropes in U.S. politics.
So there was House Speaker Kevin McCarthy (R-Calif.) on Monday, invoking it outside the White House as he works to pressure President Biden for spending concessions in return for raising the debt ceiling. The ceiling doesn’t control the level of debt held by the government but instead is controlled by it. But this is a nuanced point, so McCarthy has often suggested that the need to raise the ceiling was an opportunity to address the debt itself.
As he did on Monday.
“Every new child that was born today just got a $94,000 bill,” he said. “And they’re one day old. I think that’s wrong.”
It is wrong, but not in the way he means.
Again, this is an old line. In 1991, a witness offering testimony in support of a constitutional amendment mandating a balanced budget called the bill purportedly owed by newborns “fiscal child abuse.” A few years before, House Speaker Jim Wright (D-Tex.) wrote in the New York Times that “[t]o burden the young and those yet to be born with such staggering bills is a clear abdication of responsibility.” It is probably not as old a line as politicians saying that America’s grandchildren would be paying their bills — a line dating at least to Herbert Hoover — but it’s old.
It is true that the federal debt has surged in the past two decades. Using data from the Federal Reserve and adjusting for inflation, that’s clearly visible.
What McCarthy (and others) are doing to calculate the “bill” is dividing the amount of debt by the number of people in the United States. In 2022, there were about 334 million people in the country, so divide the $31.4 trillion in debt by 334 million and you get around $94,000.
That’s high in historical terms — but actually down slightly because of inflation. It depends on when you measure the debt and what value of inflation you apply, but $31.4 trillion in May 2023 is less in real terms than a nominal $31.4 trillion was at the end of 2022.
But it’s also sort of silly. It sounds like a lot of money to say that you’re going to charge a tiny baby $94,000, but the thing about babies is that, eventually, they become adults. That $94,000 becomes about $1,200 a year over the course of an expected 76 years of life.
This isn’t how it works in reality. When Wright was warning about the bill owed by kids in 1987, it’s not like the babies born that year actually ended up paying off the $26,600 bill (in 2023 dollars) they had received. The debt just kept increasing. Those now-36-year-olds are just paying taxes the way everyone else does, with Congress regularly opting to let the annual deficit increase instead of cutting spending or raising taxes.
When the debt did go down substantially in the lives of those 36-year-olds, it was because the deficit reversed in the second term of the Clinton presidency. That was in part because the economy was booming, in part because the end of the Cold War allowed cuts in defense spending and in part because President Bill Clinton and Congress raised taxes on the wealthiest Americans. Little of the change was a function of received bills being paid off.
It is the case that Americans pay for the debt, of course. Part of what the government spends each year is interest on the debt it has accrued. Thanks to the Federal Reserve’s increased interest rates (aimed at reducing the risk of a recession), the amount the government is projected to have to pay in interest this year has surged.
Even with that surge, though, the amount each U.S. resident would need to pay in 2023 dollars to cover the interest bill is only about $250 more than it was in 1994. In 2021, it was substantially lower than the amount owed in the 1990s.
These things change, just as the politics change. When Donald Trump was president, despite surging deficits, Republicans in Congress were happy to sign off on a suspension of the debt ceiling, despite every baby born in 2019 owing an $83,000 bill to the government.
What’s particularly odd about McCarthy’s rhetoric, of course, is that it assumes that Americans of every age should contribute the same amount to paying off the debt. Why does that tiny infant owe $94,000 instead of the retiring Americans who enjoyed the benefits of not paying off the debt for multiple decades?
The answer is politics. And that, too, is a hoary tradition.