Op-Ed: Alleviating America’s Rising Debt By Addressing Climate And Sustainability
Opinion ArticleThe United States has long stood as a beacon of hope and inspiration for the world. This article provides a few suggestions on how the US can positively impact its burgeoning debt by addressing climate challenges and pursuing a more sustainable path.
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A March 2024 blockbuster report by the US Congressional Budget Office (CBO) estimates America’s public debt to soar to $141.1 trillion by 2054, steadily climbing from the current $34 trillion, already equivalent to 99% of its GDP, to a daunting 166% of GDP. US Federal Reserve Chairman Jerome Powell and a number of other top CEOs and university professors have already raised serious concerns.
On the climate front, award-winning Earth scientist and director of the Potsdam Institute for Climate Impact Research Johan Rockström has warned that six of the nine planetary boundaries have been breached, pushing Earth beyond the safe zone. The scientific evidence of our planet’s peril is unequivocal, and time is running out to rescue it from intensive care.
According to a 2021 article published in Frontiers of Medicine, the emergence of Covid-19 – which is estimated to have cost the US economy a staggering $14 trillion by 2023 – was partly to blame on climate change factors.
Our leaders and the public at large must address two critical questions: How did we arrive here in the first place, and how do we move forward to fix it?
How Did We Get Here?
Numerous factors have contributed to this precarious situation, including, among others, unsustainable lifestyles, relentless product upgrades driven by deceiving marketing tactics, and extractive technologies leading to heightened greenhouse gas emissions and environmental degradation. Our consumption and extensive choice-driven culture has fostered the proliferation of manufacturing production lines and innumerable service offerings, programmed obsolescence of products, and overflowing landfills, epitomized by the staggering increase in average American home size, partly fueled by a direct tax model that incentivizes the excess. Happiness has become synonymous with material possessions and wealth.
The current US debt has been influenced by wars in the Middle East, the 2008 housing crisis, the Covid-19 pandemic, and several other factors. Projected estimates are unclear on the impact of unexpected pandemics or other extreme natural events.
Our educational institutions burden students with prolonged academic journeys, excessive capital investments, and unnecessary infrastructure expansions, contributing to escalating student debt. However, quick-fix solutions to alleviate debt burdens only exacerbate public debt. Our healthcare system is flawed, with Medicare and private health insurance overwhelmed with a myriad of plan options, leading to administrative costs projected to account for about 30% of all healthcare costs. The list of evident problems goes on.
Fixing Debt And Climate While Ensuring Sustainable Growth
1. Shift to an Indirect Tax Model Catalyzes Clean Growth
Addressing our contemporary challenges requires bold and radical measures. Shifting from a direct tax model to an indirect tax model can directly influence purchasing behavior.
The latter model should encompass five tax tiers, with environmentally unfriendly products taxed at the highest tier and eco-friendly products at the lowest. A similar model was implemented in India a few years ago, but it too warrants a revamped mission statement toward sustainability.
Such models catalyze a green tech startup revolution, ensuring that environmental, social, and governance (ESG) initiatives are substantive rather than superficial. A direct tax model as a complement to the indirect tax model may be appropriate only for the very rich.
Rehabilitating our planet is a necessity for many factors, including increased biodiversity and the potential containment of new viruses and diseases.
More on the topic: Addressing the Need For a Progressive Holistic Tax Model For Sustainable Development
2. Sustainable Foreign Policy Positively Impacts Debt and Climate
The US can no longer afford to serve as the global police force. India’s success in achieving freedom through nonviolent means serves as a testament to the power of nonviolent actions, inspiration, and words. If we integrate this understanding into our foreign policy, we may alleviate our debt, save lives, spend less on armaments, and rehabilitate our soil, air, and water due to the absence of bombs.
3. Sustainability in Governance
Removing money from politics ensures unbiased decision-making. Providing free advertising to election candidates by the media eliminates the need for further advertising expenditure. Laws must delineate boundaries on lobbying and special interest groups, a necessary step to avoid unwise choices. For instance, we should begin discouraging electric vehicle batteries that extract rare metals from the Earth, moon, and our ocean floor and promote metal-free biodegradable batteries instead.
4. Sustainable Education
Encouraging disruptive models in education is crucial. Companies establishing in-house centers for quality vocational education, including affordable compressed degree programs, warrant support. Aligning vocational and degree programs with the foundational elements of Earth (soil, water, air, energy, and space) heightens awareness of their interconnectedness, empowering the scientific community to address climate challenges. Measuring and managing the foundational elements via a single environmental health index assures proper stewardship. We cannot continue to build wealth without rehabilitating our planet’s health.
More on the topic: Op-Ed: Traditional Education Is Failing Us: Here’s What We Need for a Sustainable Planet
5. Simplifying Healthcare Assures Sustainability
Numerous experts have offered a variety of solutions to simplify the US healthcare system. Let us start tackling healthcare in bite-size chunks by making the complex simple. For example, streamlining the proliferation of plan choices in Medicare to just three simple plans – low, middle, and high income – may positively impact debt.
According to the Kaiser Family Foundation (KFF), in 2024, the average American Medicare beneficiary has a choice of 43 Medicare Advantage plans; some counties have more than 75. And there are 1,333 special needs plans. Medicare also offers a traditional Medicare plan and several Supplemental plans. There are a plethora of prescription drug plans, too. The entire Medicare system is overwhelming with excess advertising and an army of brokers. Behavioral economists argue too much choice makes people indecisive and they often make wrong choices. Debt reduction strategies often address spending, but simplification eliminates several bureaucratic layers and lowers cumulative costs over the years.
6. Climate-Friendly Infrastructure May Lower Debt
According to the National Center for Environmental Information, the US had 377 weather and climate disasters since 1980 where overall costs reached or exceeded $1 billion (including CPI adjustment to 2024). The total costs of the 377 events amounted to $2.67 trillion. This underscores the need for climate-friendly infrastructure.
The government should promote eco-friendly materials in all public sector projects, such as advanced green composites, permeable bio-materials made from wastewater for roads, highways, buildings, and so on. The indirect tax model mentioned earlier will foster rapid innovation in this domain. Innovative solutions, like constructing a forest with wild animals on our southern border, can mitigate climate disasters and curb illegal immigration which can exacerbate long-term debt burden.
More on the topic: US Sets Record For the Most Billion-Dollar Natural Disasters In Single Year
Conclusion
In an interdependent and interconnected world, alleviating public debt solely by direct taxes, spending cuts, monetary and fiscal policies may not be sufficient. New paradigms of thought in sustainability and climate are also warranted.
