Overcoming American Ledger Deficit - A Focus to Live More on Earned Livelihoods than Borrowed Prosperity

I made a couple of trips recently in the last two to three months and visited some nice places and museums, much to the inspiration of outer world. I purchased a car in finance recently as I already informed. Travelling in a car seems good on the surface but I had to pay $600 every month for 7 years. Will I be able to clear it off and really own a car. It is a difficult question to ponder. Purchasing is never owning. For now, the bank which financed owns my car. Nevertheless, traveling in a car is definitely an inspiring act. I went to three summits in the last 4 months – on one occasion boarding a flight to attend in New York, much to the inspiration of outer world. I have never stopped working on my daily routines and doing everything I can within my power, much to the inspiration of outer world. I had never stopped writing and publishing two posts weekly, much to the inspiration of outer world.  

While I am doing all this on the surface, let me tell about my real situation a bit. Over the past year I had been defrauded of over sixty thousand dollars of which I took loans of thirty thousand. I took the loans and hoped to clear them off with the promised returns. Since I never got the returns I was promised and completely wiped out my savings, I couldn’t repay the loan installments and defaulted on those loans.  I was working with debt settlement agency, paying a low monthly amount to repay my creditors. The most teary, heartburning and extremely sad part is I never stopped on my commitments to spending and keeping the ball rolling while facing tremendous setbacks and backstabbing. Anyone in my place would disappear for a year or more or permanently and would never resurface to the outside world, leave alone doing something good to it on top of facing these fraud schemes. How in the world can I operate and do good when the world conspired to harm me. But I am shamelessly doing all these trips, all this work, all these blog posts and doing everything I can to operate as if nothing has happened. I don’t know what I get out of these. The world will still cry over me, for I am still alive and doing this superficial work. My eyes knows the real pain and my inner self know the real pain and this is my situation. 

The sad blot on my face is I am a defaulter. Being smart enough and definitely in top 5% all my life, I operated to serve the bottom 90% with every bit of energy I had. This trip to US is an attempt in that direction as well. I never expected this would backfire on me so heavily to push me into spirals of sadness. I took these loans for the nefarious schemes and for the first time ever in my life, I defaulted on these loans. I stood incapable of repaying my debt and defaulted on these instalments. Even if I leave these bad loans, I wasn’t really sure about my ability to clear the seven-year car loan either. Here I am, drowned in myriad loans which overburdened me and doesn’t necessarily give discipline and direction to my life for a long tenure. My pain in this credit financing should not pain someone else. When I am the one failed, it is a failure of US consumer credit finance system as well which financed these purpose-less loans and drowned a consumer like me. Why do I accumulate these bad loans in first place and why is the US national debt staring at over 37 trillion. Is it the badness trickled down. I need rest to my painful and overused body and not grueling schedules to work on my loans for years. I am writing this blog, once again, for the good of the outside world, to strengthen a seemingly weak credit system and not make a failed, defaulter story like mine again. Too much to look for gain of others when I am in extreme pain. 

At the dawn of the 1980s, the United States had barely crossed the symbolic $1 trillion mark in gross federal debt. In real terms, that meant the country had taken nearly two centuries — from Alexander Hamilton’s day through World War II, the Korean conflict, and Vietnam — to reach that milestone. Debt, adjusted for inflation and scaled against the economy, looked manageable. 

Fast forward just forty-odd years, and the landscape looks unrecognizable. The federal ledger now groans under $37 trillion in obligations. The pace is startling: the U.S. added its first trillion in 200 years and the next 36 trillion in barely 44 years. Debt-to-GDP, which dipped to about 30% in the 1970s, now rivals or exceeds the World War II peak of 120%. The question practically asks itself: how did we get here, and can a nation really live with this much debt? 

Several forces converged after the turn of the century to fuel the explosion: 

1. Tax cuts without spending cuts. Beginning with the Reagan era, the U.S. embraced deep tax reductions while maintaining or expanding spending, especially on defense. The result was structural deficits baked into the budget. 

2. Wars and security spending. The post-9/11 era brought two prolonged wars, a global counterterrorism campaign, and massive homeland security investments, all financed by borrowing. 

3. Entitlement growth. Programs like Social Security, Medicare, and Medicaid swelled with the retirement of the baby boom generation and rising health care costs, automatically pushing spending higher each year. 

4. Financial crises. The Great Recession (2007–2009) and the COVID-19 pandemic (2020) unleashed emergency spending packages in the trillions, justified at the time but never fully offset later. 

5. Low interest rates. For most of the last two decades, borrowing was historically cheap. Policymakers became accustomed to treating debt as painless — a habit that now looks more dangerous as rates climb. 

The “worst consequences” are not about imminent collapse or default — the U.S. still issues the world’s reserve currency and controls the deepest bond market on Earth. But the dangers accumulate over time: 

• Interest as a budget sinkhole. Interest payments are projected to become the single largest federal expenditure within decades, consuming more than the entire defense budget. Every dollar spent servicing debt is a dollar not invested in infrastructure, education, or science. 

• Policy handcuffs. In the next crisis — whether financial, military, or climate-related — Washington will have far less room to borrow aggressively without risking investor confidence. 

• Inflationary pressures. Persistent deficits force the Treasury to issue vast amounts of debt, which the Federal Reserve may feel compelled to accommodate, raising the risk of higher, stickier inflation. 

• Global credibility risks. America’s fiscal choices ripple worldwide. If investors begin to doubt Washington’s ability or willingness to stabilize debt, borrowing costs could rise for everyone, eroding the U.S. dollar’s privileged status. 

There’s a paradox at the heart of modern American life: at the same time that the U.S. government’s national debt has ballooned past $37 trillion, American households are also piling on consumer debt that now approaches nearly $18 trillion. What once might have been framed as a sign of economic vitality — borrowing to buy a house, finance education, build a business — is increasingly raising red flags about long-term stability, both for individuals and for the country as a whole. 

The Mountain of Consumer Debt 

Let’s start with everyday Americans. According to recent data, U.S. household debt reached $18.59 trillion by the third quarter of 2025. Breaking that down: roughly $13.07 trillion is in mortgages, while credit card debt now exceeds $1.23 trillion. Add in auto loans (~$1.64 trillion) and student loans (~$1.63 trillion), and it’s clear that Americans are leaning hard on credit lines to fund the American dream. 

But how did we get here? And what does it mean when consumers are so deeply leveraged? 

 

Habits Forged in the Nation: A Culture of Borrowing 

To understand why consumer debt is so high, you have to look beyond mere numbers. It’s as much about culture as it is about necessity. 

1. Instant Gratification & Frictionless Spending 

We live in an era where buying has never been easier. Mobile payments, one-click shopping, “buy now, pay later” (BNPL) schemes — they all erase the psychological sting of spending. As Time magazine has pointed out, these frictionless financial technologies make the act of consumption feel less painful, encouraging people to swipe before they fully feel the cost. When the emotional pain of parting with cash is minimized, credit becomes a default lever — and debt becomes the silent partner in nearly every major life choice. 

2. Rising Cost of Living + Stagnant Wages 

For many Americans, debt is no longer a choice — it’s a necessity. Housing prices, healthcare, and education costs have outstripped wage growth, forcing families to borrow just to stay afloat. While low-interest mortgages might be framed as "good debt," the structural dynamics of skyrocketing living costs push even prudent borrowers into riskier territory. 

3. The “American Dream” – Debt-Fueled Edition 

Homeownership, higher education, and entrepreneurship remain central to the American narrative. But these aspirations often require financing. Student loans and mortgages are normalized — even celebrated. That’s not inherently bad, but when ambition is tethered to borrowing, debt becomes woven into the ethos of success. 

Can a Nation Live With So Much Debt? 

Here lies the central, unsettling question. Japan has carried debt above 200% of GDP for years, suggesting that advanced economies can sustain high debt loads under certain conditions. The United States, uniquely, enjoys the “exorbitant privilege” of borrowing in its own currency, with global demand for Treasuries as the ultimate safe asset. 

But living with debt is not the same as thriving with it. A household may keep refinancing its mortgage forever, but if interest starts swallowing half its income, life quality deteriorates. Similarly, the U.S. risks a future in which debt service, not strategic choice, defines the federal budget. 

Is this trajectory inevitable? Not necessarily. Tax reforms, entitlement adjustments, and disciplined budgeting could stabilize debt ratios. But each year of delay compounds the problem, because interest itself becomes the fastest-growing federal program. 

The Road Ahead 

Debt is woven into the fabric of American life. For decades, it has powered our ambitions — homes, education, innovation, entrepreneurship. Yet somewhere along the way, borrowing shifted from a strategic stepping-stone to a reflexive habit. Today, consumer debt is climbing, national debt is ballooning, and millions of households feel trapped in a cycle of repayment. 

But debt itself isn’t the villain. The danger lies in how we use it. Just as a hammer can build a house or break a window, borrowing can build wealth or unravel it. And at a national scale, strategic investment strengthens the country, while unchecked deficits weaken its future. 

It’s time for a new relationship with debt — one grounded in clarity, discipline, and purpose. A future where Americans take control of their financial lives, and where the nation models the same responsibility it expects from its citizens. 

In the end, America’s relationship with debt mirrors its relationship with ambition. We borrow because we believe in tomorrow — in opportunity, in progress, in the promise that effort yields reward. But when borrowing becomes a substitute for planning, when the future is pledged to pay for today’s impulses, both households and the nation lose their footing. Reducing consumer and national debt is not about retreating from aspiration; it is about anchoring aspiration to stability, clarity, and intention. 

If individuals cultivate habits of mindful spending, disciplined saving, and purposeful borrowing, they not only strengthen their own futures but collectively shape a more resilient economy. And if the nation mirrors this discipline — investing strategically, budgeting responsibly, and rewarding efficiency — the United States can move from survival mode to a new era of sustainable growth. 

Ultimately, good debt is not an enemy but a tool, one that can elevate families, empower innovators, and build the infrastructure of generations. When used wisely, it amplifies opportunity. When misused, it multiplies fragility. America’s next chapter depends on choosing the path of wisdom: borrowing with purpose, spending with discernment, and building toward a future where prosperity is not borrowed, but earned and secured.