Thursday Edition: Debt Bomb, 2034

We might have an answer on when the national debt bomb will explode. (American Enterprise Institute)

A new AEI Economics study: American Enterprise Institute researchers estimate the sky-high U.S. national debt will become unsustainable once it hits 154% of GDP.

• That’s just 30% higher than where debt levels currently sit.

• Current projections indicate unsustainable debt levels will be reached by 2034.

What would happen: Should we reach this critical threshold, the U.S. would likely “face higher interest rates, difficulties in selling bonds, and financial instability” leading to inflation.

• The U.S. would also lose the ability to keep government spending stable because higher debt servicing costs (like paying interest) would take up more of the budget, leaving less room for public services and investments, and making it even more difficult to reduce deficits.

Bubba’s Two Cents

It’s not exactly the sexiest topic, but you’d think the record-high $35 trillion national debt would play some role in the 2024 presidential race. So far it’s been pretty much radio silence from Kamala Harris and Donald Trump. Both candidates have seemed to emphasize policies that are likely to raise deficits, probably because such policies are pretty popular:

Conditions on the ground suggest Donald Trump should be running far ahead of Kamala Harris, but that’s not what’s happening. (The Free Press)

A new Gallup analysis: For the first time in decades, more Americans identify as Republicans or Republican-leaners (48%) than Democrats or Dem-leaners (45%).

Why this is a big deal: As Gallup senior editor Jeffrey Jones noted, “Party affiliation and voting are strongly predictive of individuals’ vote choices, with the vast majority of identifiers and leaners voting for the candidate of their preferred party.”

• In years when they have a larger-than-usual party ID edge - 1992, 1996, 2008, 2012 and 2020 - Dems won.

• In years when the advantage was smaller - 2000, 2004 - Republicans took the White House.

An eye-popping statistic: When it comes to Gallup’s “key measures” of the election environment - things like presidential job approval, economic confidence and which party Americans trust more to handle the country’s top issues - Democrats hold the advantage on exactly zero.

• Republicans, on the other hand, own a whopping 8 out of 10 of these categories.

2024: Despite the favorable environment, Trump is far from blowing Kamala Harris out of the water like you might expect.

• In fact, most forecasts say the race is a toss-up, with maybe a slight edge for Kamala.

What’s the deal? In a new essay, Free Press editor Oliver Wiseman argues that, while friendly media coverage for Harris may be a factor, ultimately Trump’s campaign strategy is the main reason he’s not handily beating his opponent.

• According to Wiseman, Trump’s campaign missteps include promoting silver coins, using cryptocurrency for publicity stunts, associating with controversial figures like Laura Loomer, making inflammatory statements and allowing Harris to rebrand without a focused critique of her record.

Wiseman:

The public doesn’t think all that highly of federal agencies. (Gallup)

A new Gallup poll: The U.S. Postal Service is the only federal agency with majority-level positive ratings, according to a survey asking Americans to rate 15 different agencies.

• Less than 35% of Americans rate eight federal agencies as "excellent" or "good."

• These agencies include the Secret Service, Department of Veterans Affairs, Department of Justice, Environmental Protection Agency, Federal Reserve Board, Department of Homeland Security, Food and Drug Administration and Internal Revenue Service.

Zoom in: Only 32% of U.S. adults rated the Secret Service as "excellent" or "good," a sharp 23-point drop from the previous year.

• Likely in response to concerns over the attempted assassinations of Donald Trump, Secret Service approval fell sharply among Republicans and Republican-leaning independents, with positive ratings dropping 26 points to 20%.

Even the best-rated agency is kind of dysfunctional: Despite the positive vibes for the Postal Service, demand for mail has fallen (the largest type of mail by volume is marketing, or junk), and losses are piling up, with $6.5 billion lost in 2023.

Bubba’s Two Cents

Why are these ratings so low? It’s probably a blend of Republican-led anti-institutional sentiment and general frustration with the bureaucratic inefficiency and dysfunction many people see in federal agencies.

The numbers: Roughly 50% of voters have an unfavorable view of Sen. J.D. Vance, R-Ohio, while only 25% have a favorable opinion, per a new Associated Press-NORC poll. (AP)

• In contrast, 40% of voters view Minnesota Gov. Tim Walz positively, with only 30% viewing him negatively.

Context: The two parties’ vice presidential nominees are set to square off in a debate next week amid a 2024 race for the White House that remains neck and neck.

Bubba’s Two Cents

As Vance’s public image worsens - his unfavorable rating has surged by 10 points since July - it’ll be interesting to see if he can reverse the trend in next week’s debate. While he's a pretty well-spoken guy (I think he actually performs reasonably well in certain situations, like one-on-one Sunday show interviews) the real question is: How much will voters care about a debate between the second-string players?