For forty years, Richard Haass has spent served in Washington, offering counsel to presidents, acting as the U.S. Representative internationally, and alerting Congress to worldwide dangers. However, the seasoned diplomat now asserts that America's most perilous challenge originates not from Russia, China, or the Middle East.
TL;DR
- Richard Haass warns the $38 trillion US national debt is a national security crisis, not just economic.
- Annual deficits near $2 trillion and interest payments exceeding military spending are crippling US strength.
- The debt limits defense spending and American global influence, with potential for market collapse.
- Haass proposes bipartisan action on entitlement reform, tax increases, and IRS hiring to slow debt growth.
It’s coming from inside the country: the ugly, festering $38 trillion national debt he says is undermining U.S. Strength.
“You feel a little bit like Paul Revere—except instead of the British coming, the crisis is coming,” Haass told Coins2Day in an exclusive interview. “It’s a slow-motion crisis. We’re already paying a significant price.”
Haass, the former president of the Council on Foreign Relations and a longtime national security official, is one of several experts contributing to a new series of debt-focused essays published by the Peterson Foundation. His argument is simple: America’s debt is no longer just an economic challenge. It is a national security problem, and one Washington is refusing to confront.
In the paper, Haass and Carolyn Kissane present striking figures: U.S. Federal debt has reached $38 trillion, approximately 125% of GDP. Yearly deficits are close to $2 trillion. Furthermore, interest expenses have surged, amounting to about $1 trillion last year, exceeding the nation's military spending.
“It’s already a national security crisis,” Haass told Coins2Day. “Servicing the debt crowds out more productive uses of national resources. You don’t need a bond market collapse to have a crisis.”
Haass contends that these pressures are limiting American strategy. Given Russia's advances, China's military upgrades, and ongoing conflicts in the Middle East, he suggests that defense expenditures might require an increase rather than a decrease, and this should happen promptly. However, the political willingness for military funding is diminishing, as national debt increasingly shapes the financial outlook and populist sentiments favor $2,000 revenue checks or rent control.
“It becomes very hard to drum up support for what’s needed globally when people say, ‘We’re already deeply in debt. We can’t afford it,’” he said. “The debt is already limiting American options.”
A ‘slow-motion’ crisis that could still become a sudden one
Haass outlined two potential outcomes. One is drastic, termed the “cliff” scenario, involving a swift collapse in market trust akin to the UK's 2022 meltdown event, where unfunded tax reductions provoked a significant bond market sell-off and resulted in PM Liz Truss's departure. In the U.S., he cautions, this could be initiated by an unsuccessful Treasury auction, political turmoil, or even geopolitical pressure, such as China liquidating U.S. Debt to influence Washington during a Taiwan conflict.
“I think China could weaponize its Treasuries,” he said. “They would pay a financial price. But if you’re Xi Jinping and your legacy is Taiwan, I think he’d pay that price.”
Haass posits a second, less overt but still perilous, situation we're currently experiencing. Year after year, debt escalates, impeding domestic investment, constricting defense spending, and consequently diminishing American influence internationally. Agencies tasked with cybersecurity, infrastructure, public health, and counterextremism are compelled to reduce expenditures—a pattern seen during DOGE, which specialists estimate estimate could cost taxpayers $135 billion this year through reduced tax revenue and productivity, all while interest payments claim a larger portion of the budget.
“[W]e are guilty of spending our rainy-day fund in sunny weather,” Haass and Kissane wrote in the paper.
The political problem nobody wants to touch
Like other economists, Haas believes the obstacle isn’t some economic reform; it’s political.
“It will be extraordinarily difficult” to do what needs to be done to reduce the debt, he admits. Entitlement reform—in other words, making changes to Social Security or Medicare—is politically toxic. Tax increases are radioactive. And Washington remains locked in shutdown brinkmanship, just coming off the longest government shutdown in history, a testament to how polarized the nation is.
However, he contends a workable plan is possible: implementing income-based eligibility for Social Security, incrementally increasing the age for retirement, modifying the cost-of-living adjustment calculation for those benefits, rehiring IRS personnel, and slightly increasing the corporate tax rate. His objective, he states, is not to eradicate the debt but to slow its growth relative to the GDP.
“What’s required is not unrealistic,” he said. “You just need to change the trajectory.”
He believes a bipartisan commission may ultimately be the only workable path.
“Commissions exist to insulate the process from the politics,” he said. “It may take a coalition of the willing.”