The American Dream Under Threat from National Debt: An Economist’s Warning

The hefty national debt of $38.5 trillion is casting a long shadow over the American Dream, according to leading economist Kurt Couchman. He warns that if the ongoing discussions about a debt crisis escalate, the United States could plunge into a severe economic depression. Many are asking how this situation developed and what it means for everyday Americans.

Understanding the Crisis

The American Dream, which embodies the idea that anyone can achieve success through hard work, faces numerous challenges today. Rising housing costs, spiraling education expenses, and increasingly higher costs of living are making it nearly impossible for people to feel secure. Even reputable figures like JPMorgan CEO Jamie Dimon acknowledge that education and housing are barriers that hinder opportunities for the youth.

Yet, Couchman points out that these issues often trace back to the country’s enormous national debt. In the last quarter of 2025 alone, the U.S. government spent a staggering $276 billion just on interest payments for this debt. This staggering figure raises alarms among economists like Ray Dalio, who warn that such financial strain will eventually limit government investment necessary for economic prosperity.

The Consequences of Rising Debt

During a recent Congressional testimony, Couchman highlighted that the escalating debt could trigger a crisis in the bond market, leading to severe repercussions for the average American. He stressed that the actions of Congress will significantly determine whether the American Dream—characterized by peace, freedom, and prosperity—can survive or if the nation will face a downward spiral.

The inflation crisis we are experiencing today is rooted in excessive government spending that began during the pandemic, Couchman explained. He noted, “Excessive federal spending and debt have led us to this point.” Research from institutions like the Congressional Budget Office indicates that when national debt surpasses a critical threshold relative to economic growth, it can hinder GDP growth significantly.

Couchman elaborates, “When interest payments consume too much of the budget, it leaves fewer opportunities for investment and growth. Consequently, job opportunities become scarce and wages stagnate.”

Is the Worst Yet to Come?

The worst-case scenario—a debt crisis—could arise if the U.S. fails to find buyers for its debt. This situation forces the government to either rein in spending, offer higher interest rates on loans, or print more money, which in turn leads to potential inflation. If such a crisis occurs, Couchman warns that the likelihood of a recession, or even a depression, could become a reality.

Moreover, this economic instability could create serious security risks and threaten the political landscape, as desperate citizens might gravitate towards extreme political views. Such conditions can further endanger the American Dream.

Can We Avoid a Crisis?

While some argue that the U.S. is too big to fail and can easily maneuver away from such a crisis, Couchman emphasizes the need to learn from the mistakes of other nations. Recessions are inevitable; history shows they occur roughly every five years. However, having proactive measures in place could mitigate the damage.

One of the most significant challenges facing the government is addressing its spending habits. Many officials shun the idea of making unpopular decisions, as it risks their political careers. The national debt issue often feels like a game of “chicken,” with each administration postponing the necessary actions, assuming the next one will deal with the mess.

To restore balance, Couchman suggests that the federal government could impose budget-balancing “fiscal rules.” However, these often yield only short-term improvements without lasting effects.

Seeking Transparency and Solutions

Couchman, who authored Fiscal Democracy in America, argues for greater transparency in government spending. Quoting Thomas Jefferson, he advocates for clarity, suggesting that the nation’s finances should be as comprehensible as a merchant’s books. This way, every Congressman and citizen can scrutinize spending, investigate misuses, and hold their representatives accountable.

Couchman states, “If Congress could create a realistic budget that includes all spending and revenue, it would allow proper discussions about worth and value. Only then can we prioritize effectively and decide what is essential and what can be cut.”

In conclusion, the path to safeguarding the American Dream hinges on addressing the alarming national debt. By fostering transparency and accountability, America can steer clear of an impending crisis and move toward a brighter economic future.

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Original Text – https://fortune.com/2026/01/18/national-debt-killing-american-dream-inflation-recession/