Top Economist Says Washington Can’t Fix Its Own Debt Addiction, Calls for Constitutional ‘Debt Brake’ to Stop $40 Trillion Crisis
Key takeaways
- Steve Hanke proposes a Constitutional Convention to impose fiscal discipline and halt America's debt buildup.
- Total public debt outstanding: $39.89 trillion
- Debt held by the public: 101% of GDP by year-end
- Annual deficit: $1.9 trillion in 2026
What happened
Johns Hopkins economist Steve Hanke suggests invoking Article V of the US Constitution to call a limited Constitutional Convention to impose fiscal discipline and halt America's debt buildup.
Why it matters
Hanke argues that Washington cannot discipline its own borrowing and that a Constitutional Convention is necessary to propose a binding 'debt brake' amendment to the US Constitution.
Short-term and longer-term
Short-term. Hanke's proposal could impact the Treasury yield curve and the potential for a 'doom loop' in the Treasury market.
Longer-term. A successful Constitutional Convention would require a significant shift in the US fiscal policy framework, with potential implications for the country's debt trajectory and economic growth.