CHAPTER XIII — FISCAL RESILIENCE & THE NATIONAL BALANCE SHEET

Paying for the Future Without Eating Our Young

Introduction

The federal budget is where our values collide with arithmetic.

In the coming decades, the United States faces a triple bind:

An aging population
Structurally rising healthcare costs
Interest payments that grow faster than the economy if we do nothing

Today, federal debt held by the public is roughly the size of annual GDP. On current trajectories, it continues rising as interest and mandatory spending outpace revenues. There is no single magic “debt-to-GDP ratio” at which disaster strikes—but there is a clear difference between high-but-stable and high-and-rising-with-no-plan.

This chapter is not a morality play about “austerity” vs “spend freely.” It is a framework for fiscal resilience:

Borrow boldly for investments whose payoffs we understand
Stop pretending we can permanently out-borrow basic math
Protect the most vulnerable while being honest about tradeoffs
Treat intergenerational fairness as a core constraint

We do not pick one sacred number for “right” debt-to-GDP. Instead, we commit to putting the national balance sheet on a clearly sustainable path—informed by economic evidence, historical experience, and transparent public debate.

1. Principles for a Healthy National Balance Sheet

1.1 Trajectory Over Magic Thresholds

We reject the idea that crossing 80% or 90% debt-to-GDP automatically triggers collapse. History and research simply do not support a single cliff.

What matters is:

Whether debt is rising faster than the economy year after year
What we are buying with that debt
Whether interest costs are crowding out the investments that actually make future generations richer

Our goal:

Within a generation, put U.S. debt on a stable or gently declining path relative to GDP, while preserving room to respond to recessions, wars, and emergencies.

1.2 Invest Boldly Where Returns Are High

We are unapologetic about borrowing for investments that have strong evidence of high social return, including:

Early childhood and literacy
Universal baseline healthcare
Education and lifelong learning
Infrastructure and energy abundance
Research, innovation, and entrepreneurship

We are far less tolerant of borrowing for:

Programs that repeatedly fail to show results
Open-ended subsidies with weak justification
Short-term political giveaways disguised as “investments”

In other words:

Debt is justified by future value, not by vibes.

1.3 Truth-Telling About Tradeoffs

We will not pretend:

That we can have European-style social guarantees with permanently low U.S. tax levels
That “growth alone” can forever outrun demographics and health costs
That every popular program can grow indefinitely with no consequences

Fiscal resilience requires:

Honest baselines
Transparent assumptions
Clear statements of what we will not fund

1.4 Intergenerational Fairness

A fiscally serious country asks:

What are we handing to our children—assets and capabilities, or bills and brittle systems?
Which commitments genuinely make future Americans more capable?
Which simply shift burdens onto them because we were unwilling to face hard choices?

We treat intergenerational fairness as a constraint, not an afterthought.

2. Entitlements in a World of Longer Lives

2.1 Universal Healthcare as a Baseline, Not a Perk

This platform commits to universal baseline healthcare—effectively a Medicare-like guarantee for everyone. That is not a cut to Medicare; it is a broadening of the promise:

Everyone should be assured reasonable medical care services
Coverage should not depend on employer or zip code
Prevention and primary care should be easy to access

Financing that baseline honestly means:

Recognizing that healthcare is the largest structural driver of long-run spending
Designing payment and delivery systems that control costs through efficiency and prevention, not denial of care
Being explicit about the revenue sources that will support this system

Social Security is a promise: work, contribute, and you will not face destitution in old age. Keeping that promise requires adjusting to real morbidity and mortality data and to longer, healthier lives.

We are open to:

Gradually raising the “normal” retirement age, indexed to longevity
Increasing progressivity so lower lifetime earners are protected
Updating disability and early-retirement rules to reflect real physical burdens

But we refuse to:

Balance the books solely by quietly cutting benefits for those with the fewest options
Ignore the reality that life expectancy and health are unevenly distributed—office workers and manual laborers do not age the same way

Any adjustment to retirement ages must therefore:

Include stronger protections for workers in physically demanding jobs
Preserve adequate benefits for people with shorter expected lifespans
Phase in slowly, with clear advance notice so people can plan

2.3 No “Sudden Shock” for Near-Retirees

We will not change the rules out from under people already at or near retirement.

Policy changes should:

Apply primarily to younger cohorts
Be phased in over decades, not years
Be communicated clearly, not buried in footnotes

3. Tax Architecture: How We Pay for What We Value

3.1 Prefer Income and Capital Taxes Over Broad Consumption Taxes

Sales and consumption taxes tend to be regressive when measured against current income: lower-income households spend a higher share of their earnings on consumption.

We therefore:

Prefer to rely primarily on income and capital taxes for federal revenue
Are cautious about adding a large, broad-based national consumption tax (like a VAT)
Remain open to targeted Pigouvian consumption taxes (e.g., on pollution or clearly harmful products) when they align incentives and improve health or environmental outcomes

If a future Congress considers a national consumption tax, this platform favors designs that:

Offset regressivity with direct cash rebates or credits
Replace, rather than simply add to, other burdensome taxes on workers

3.2 Capital Income and Labor Income

Our bias is simple:

People who earn very high incomes from capital should not face dramatically lower effective tax rates than people who earn similar amounts from work.

We therefore:

Support narrowing the gap between top effective tax rates on capital income and labor income
Favor preserving incentives for genuine risk-taking and innovation (e.g., building new firms), not just tax arbitrage
Are open to reforms that:
- Treat long-term capital gains more like ordinary income at very high incomes
- Reduce avoidance opportunities that turn labor income into lightly taxed capital flows

3.3 A Modest Wealth Tax as a Backstop

Extreme concentrations of wealth can undermine equality of opportunity and warp political influence.

We support exploring a modest, high-threshold wealth tax as a backstop, not a primary revenue engine, with design constraints:

Applies only above a very high net-worth threshold (e.g., tens of millions per individual)
Annual rate in the 0.1%–0.5% range—small relative to expected average returns
Coordinated with capital income and estate/inheritance taxation so people are not double-taxed on the same base
Flexible for illiquid but clearly valuable holdings, with options for deferral and installment payment

The goal is not to fund the entire welfare state from a small number of families. The goal is to ensure that very large accumulations of wealth contribute at least modestly each year to the society and infrastructure that sustain them.

4. Metrics, Guardrails, and Queries

4.1 Metrics for Fiscal Resilience

We will track:

Debt-to-GDP over rolling 10- and 20-year windows
Interest payments as a share of federal revenue
Primary balance (deficit before interest) over the cycle
Age-specific net benefit patterns (are we loading costs onto the young?)
Share of federal spending going to genuine investment vs pure consumption

4.2 Queries for Reflection

At the end of the day, fiscal policy is moral as well as technical. We suggest a few questions this chapter—and future readers—should keep asking:

When we borrow, are we funding things our children will thank us for—or bills they will resent?
If we raise retirement ages, how will we protect people whose bodies and health simply cannot carry them that far?
Are we avoiding broad consumption taxes because they are unfair, or because they are politically inconvenient—even when paired with rebates?
Is a modest wealth tax here to raise meaningful revenue, or primarily to ensure that extremely wealthy households cannot reduce their effective tax rate near zero?
What would fiscal policy look like if we treated truth-telling about costs and tradeoffs as a non-negotiable civic duty, not an optional virtue?

This chapter is an early blueprint. Future revisions will tighten the numbers, incorporate more evidence, and spell out specific parameter choices—but the principles of resilience, fairness, and honesty should remain.