Several days ago, just as America’s national debt topped $40 trillion for the first time, China’s official propaganda outlets took the opportunity to mock the United States over this ominous milestone.

Xinhua is the Chinese government’s official news agency, and they published a scathing commentary comparing the US national debt to Frankenstein and his monster. They noted both were “destroyed by the forces they had set in motion,” and that America “risks a similar end.”

Another Xinhua social media account mocked the US government for borrowing new debt to pay back old debt, joking, “sounds like a perfect plan.”

And a different Xinhua piece warned that US Treasuries were transforming from a rock-solid “risk-free” safe haven asset into a source of volatility.

Xinhua’s comments are not wrong. $40 trillion an insane amount of debt, and if you include state and local debt across the United States— New York, California, Chicago, etc., the total gross debt grows to $44 trillion.

The worst part is that few politicians are serious about cutting the debt, or even slowing down the borrowing. Congress can’t even cut hundreds of billions of dollars’ worth of obvious fraud.

But the criticism is pretty rich coming from the Chinese Communist Party.

America’s federal debt is roughly 125% of GDP. Even including state and local debt it’s 135% of GDP.

But China’s is 107% of GDP— so it’s not like the CCP is some paragon of spending restraint! And that 107% number is just what they publicly acknowledge.

Here’s one example of an accounting trick China uses to keep its full debt off the books.

For decades, Chinese cities weren’t allowed to borrow directly. So as an alternative they set up government-owned companies to do the borrowing for them.

These government-owned companies built the subways, the industrial parks, and the apartment towers, but the debt sat on the companies’ books instead of the government’s.

In November 2024 China’s government finally admitted to trillions of dollars worth of this hidden debt. And they announced a five-year plan to move it onto their official balance sheet.

America’s debt has been growing steadily: a horribly grotesque, absurdly wasteful $2 trillion per year since 2020. But China’s debt takes a quantum leap every time the CCP tells a little more truth.

And by the IMF’s count, China’s real government debt comes to 135% of GDP this year… dead even with America’s.

But Chinese debt pulls way ahead of the US when you factor in actual private debt held by companies and citizens.

Chinese corporate debt, for example, sits at 143% of GDP. US company debt is about HALF of that level. And let’s not forget that the biggest Chinese borrowers are state-owned enterprises where the politicians are ultimately in charge. So I’m suuuuure those company audits are totally above board…

The real question is HOW is this money going to be paid back. And by WHOM?

In January, China’s statistics bureau reported that just 7.9 million babies were born in 2025, down from 9.5 million the year before… and the fewest in modern China’s history. China’s fertility rate is 0.96, not even half of what it takes to keep a population steady. And China’s population shrank for the fourth year in a row.

America’s debt will land on the next generation, which is bad. But at least America HAS a next generation.

Decades of the idiotic one-child policy left China with families with (hopefully) one worker supporting two parents and four grandparents. That same worker will now inherit his share of China’s debt at 135%+ of GDP.

America’s fiscal challenges are immense. But they can be solved with common sense solutions— eliminating obvious fraud, making government more efficient, scaling back regulations that hamstring small business growth, reforming the immigration system, reforming Social Security.

China, on the other hand, needs a time machine to solve its problems. And since no such time machine exists, they just cook the books.

Seriously. A shrinking population is deadly for a nation’s economy. China can’t go back in time to reverse its one-child policy. And they can’t fix it with immigration either— because few people want to move to China!

This is why so many Chinese companies are developing robotics— it’s an absolute necessity there. But even this comes with a major social cost, i.e. higher unemployment.

And China cooks the books on those numbers as well.

When youth unemployment hit 21.3% in June 2023, the bureau suddenly decided that its methods of calculating unemployment needed immediate changes.

Plus any criticism or complaining leads to imprisonment… or worse.

In October 2020, Jack Ma, Alibaba’s founder and then the richest man in China, gave a speech in Shanghai saying China’s banks ran on a “pawnshop mentality” and its regulators were out of date.

Two weeks later the Chinese government killed his payments company’s stock listing, which would have been the biggest in history, and Ma disappeared for three months.

This method of control is why no one can really trust anything from the Chinese government.

That includes their attitude that they will some day rule the world.

When President Trump visited Beijing earlier this year, Xi Jinping asked whether China and the United States could “overcome the so-called Thucydides Trap,” the theory that a rising power and the one it threatens end up at war.

China’s government has spent years telling anyone who’ll listen that America is finished and China’s time has come.

America does have challenges. And there is still some time left to get its house in order to avoid serious consequences.

But China is not its replacement.

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King Hammurabi of Babylon had a simple rule for home builders: if the house you built collapsed and killed its owner, you were put to death.

That was law #229, carved in stone almost 4,000 years ago. And some version of this rule has existed for most of human history. Even to this day, it’s a tradition among architects to spend the night under a bridge they designed to prove that it’s safe.

Bottom line, people who built things were often expected to eat their own cooking and suffer the successes and consequences of their work.

The United States Congress has spent decades perfecting the opposite arrangement.

Start with the salary. Members of Congress earn $174,000 a year, more than double what the median American household makes. Yet Congress would like you to know how painful that is.

Senator Tommy Tuberville calls the job a “sacrifice.” Representative Pramila Jayapal complains that “most of us get paid less than our chiefs [of staff] at this point.”

Current and former members are suing the government, demanding retroactive cost-of-living raises, with claims as high as $420,000 apiece.

Bear in mind, again, that Congressmen already make $174,000 per year. Yet the House of Representatives averages just 150 days in session per year. And last year’s legislative calendar scheduled just 137 days.

Most Americans work at least 250 days a year. So, adjusting for actual days worked, Congressmen are actually earning nearly $300,000 based on a normal work year. So the pay gap between everyday Americans and their Congressional representatives is even greater than at first glance.

And just how do they fill their 150ish work days? The Democratic Congressional Campaign Committee once handed its incoming freshmen a model schedule:

Four hours of the day went to fundraising calls. Another hour to something called “strategic outreach”, i.e. being aligned with the party bosses. The actual job of representing constituents gets, maybe, 3-4 hours per day.

By the party’s own math, half of a congressman’s day goes to keeping the job rather than doing it.

This is insane. A welder doesn’t get to spend half of his day persuading people to let him keep his job; rather, if he doesn’t want to get fired, he simply has to do a good job. Pretty simple.

But members of Congress can’t run on their records, because their record is the insane world that we all live in.

So they spend their days telling lies to donors in order to raise enough money to tell more lies in TV commercials and email blasts. Anywhere else, this cascade of lies would be considered criminal fraud. In politics it’s just campaigning.

And in a few weeks, those campaign pitches will even receive a special pass around Gmail’s inbox filter: starting September 8, 2026, Google will let verified political committees bypass it entirely, just in time for the midterms. Your inbox has rules; their fundraising has an exemption.

But the exemptions don’t stop there.

Thanks to Congress, Americans are required by law to have some overpriced health insurance plan. But politicians have a special plan, with taxpayers footing the vast majority of the premium… plus coverage for life once a member qualifies for retirement after serving just FIVE years in Congress.

So the same people who built the most unaffordable healthcare system in the world exempted themselves from ever feeling the pain.

Pensions repeat the pattern: members elected before 2013 earn a pension that accrues nearly twice as fast as a regular federal worker’s, collectible as early as 50. They let Social Security drift toward insolvency for you. For themselves, they built a backup.

Then there’s the stock trading. A corporate executive who trades on confidential information goes to prison. Congress never bothered to apply those rules to itself until the 2012 STOCK Act.

That might explain how former House Speaker Nancy Pelosi went from a roughly $3 million net worth when she entered Congress in 1987 to an estimated $280 million today. It’s all apparently due to her husband’s extreme investment prowess.

But she’s far from the only one. Must all be a wild coincidence.

Even after the 2012 STOCK Act which required politicians to disclose their stock trades, nothing changed. Seventy-eight members broke that law in a single term— yet in the fourteen years since the STOCK Act, not a single one has been prosecuted for insider trading.

Even Speaker Mike Johnson says, “Look, at least let them, like, engage in some stock trading, so that they can continue to, you know, take care of their family.”

Imagine the private-sector version: if JP Morgan announced a new campus in Texas and its CEO, Jamie Dimon, bought up the surrounding land to sell to his own company, he’d be indicted before the concrete cured.

Congress runs that trade every day, on information you’ll never see, and calls it “taking care of their family”.

Then you’ve got their housing perks.

Representatives can bill taxpayers for their living costs in Washington DC— up to $276 a night for lodging, plus a $92 meal allowance.

What’s interesting is that this is a recent adjustment going back to just 2023. Congressmen were ‘suffering’ the worst inflation in four decades. Rather than acknowledge that they themselves were instrumental in creating that inflation, they cooked up a bailout for themselves so that they wouldn’t have to pay sky-high prices.

In short, you pay higher living costs. Congressmen bill you for theirs.

Congressmen also routinely get sweetheart deals from banks and mortgage brokers; during the 2008 financial crisis, for example, America’s largest housing lender at the time ran a VIP program that waived fees and cut prices on home loans for politicians and key staffers.

Everyone else pays the going rate— 6% to 7% today. Politicians get special terms, and I’m sure there are no strings attached.

An organization that never feels its own failures has no reason to fix them. The debt, the inflation, and the fraud keep compounding no matter who wins.

Hammurabi figured out the fix 4,000 years ago: make the builder liable for his own construction. Congress has spent decades making sure the roof always comes down on somebody else.

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In 2012, a 76-year-old Vietnam veteran named Jerry Meekins bought a $197 Spirit Airlines ticket to Atlantic City to visit his daughter.

Then his doctor told him two things: he had terminal cancer, and he could not fly. Meekins asked for his money back. Spirit said no.

He offered a letter from his oncologist, hospice paperwork, even his prepaid funeral package. Spirit wouldn’t look. CEO Ben Baldanza publicly blamed the dying man for not buying travel insurance. A week of national outrage later, Baldanza caved and refunded the fare himself.

It was not out of character. Five years earlier, Baldanza hit reply-all on a complaint from a passenger whose delayed flight cost him the concert he was flying to see. “We owe him nothing as far as I’m concerned,” the CEO wrote. “Let him tell the world how bad we are. He’s never flown us before anyway and will be back when we save him a penny.”

That was Spirit’s business model: treat customers like garbage and bet they’ll crawl back for a penny. Unsurprisingly, they went bankrupt.

Rule #1 in business is ‘the customer is always right’. At a minimum, businesses know that they need to treat paying customers with basic courtesy. Duh.

But governments never learn that lesson; they don’t have to extend any courtesy because they take your money at the point of a gun.

Rob Streeper has lived in his San Antonio home for 18 years. In June, the city’s code enforcement office sent him a notice of violation because a tree on his property had a branch that was hanging too low over the public sidewalk.

Fair enough. Keeping the sidewalks passable is all part of the mundane administrivia of municipal government. But there was just one problem: a bird was nesting on that particular branch of Mr. Streeper’s tree.

Streeper is apparently a staunch rule follower, because he called the US Fish and Wildlife Service to ask what to do. A federal agent told him that removing an active nest violates the Migratory Bird Treaty Act of 1918, which carries up to six months in prison and a $15,000 fine.

In other words, the local government was threatening to fine him for failing to commit a federal crime. And he pays taxes to fund both his city council as well as the US Fish and Wildlife Service.

Streeper reported this back to the city, and even made clear that once nesting season ends, “we have no problem with cutting the branch.”

None of it mattered. Two months later, a $300 citation appeared. “Nobody talked to us,” he said. “They just taped it to the door.”

Eventually a code enforcement officer told him what was really going on: a neighbor had been calling the city every single day to complain about the branch.

From a bureaucrat’s perspective, the path of least resistance was to simply issue the fine, and ignore the injustice of it. After all, the bureaucrat wouldn’t suffer for any of it.

And at no point in this story does a judge or jury appear. Streeper could have technically contested the ticket in municipal court, and a jury of random strangers would have sided with him in a heartbeat. But that means a court date, days off work, and more weeks of the machine, all over a $300 ticket that should never have existed.

In many respects the process IS the punishment. The government never needs to be right— but it is more expensive to fight them than to obey them.

What finally fixed it was a TV camera. On August 14 at 10:59 a.m., one minute before a KSAT 12 news crew pulled up to the house, Streeper’s phone rang. It was a city official named Michael Uresti, calling to say the matter had “reached my level.”

The ticket was dismissed, the branch received a stay of execution (until late September), and the common sense that went missing for two months turned up in sixty seconds.

“It took telling the code compliance people that [local news crews] were involved for them to finally back off,” Streeper said.

Until then, not a single bureaucrat who touched this case felt compelled to stop it.

This is how the whole system works. In 2021, for example, the Biden administration ordered its contractors to vaccinate their employees, while Texas banned employers from mandating vaccines at all.

Companies faced an impossible choice: break state law, or lose their federal contracts. It took lawsuits from 26 states and a federal injunction to sort out the mess.

Or ask Mike and Chantell Sackett, who bought a $23,000 lot in Idaho and started building a home. The EPA showed up, declared their land a federally protected wetland, and threatened penalties of over $40,000 per day.

Better yet, the agency insisted no court in America even had the power to review its order. The Sacketts needed sixteen years and two unanimous Supreme Court decisions to win— the first just to establish their right to be heard at all.

And those were the lucky ones. The contractors had 26 state attorneys general. The Sacketts had a public-interest law firm and sixteen years of patience. Streeper had a news crew.

But if you don’t have lawyers, politicians, or cameras on your side, you just get pummeled by the system.

That’s what happens when there are so many rules, so many agencies, and so many levels of government. Compliance with the law becomes impossible.

Meanwhile, government doesn’t uphold its end of the bargain. It can’t be bothered to stop the riot outside a citizen’s house or clear the drug pushers from his sidewalk. But bureaucrats will happily wreck someone’s life over an errant tree branch.

And the tree branch is the smallest version of the story. The Federal Reserve destroyed a quarter of the dollar’s value in five years. Congress ran the national debt to $40 trillion while letting Social Security race toward insolvency.

Nobody has answered for any of this incompetence, and nobody ever will. The consequences and penalties are reserved for a man with a bird’s nest in his tree.

A government that does this has lost its way, lost its moral compass.

This is simply not how you treat anyone, let alone your own citizens. And it is not what a functioning free society looks like.

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In June of 1944, American soldiers were storming the beaches of Normandy, leading the fight to defeat the Nazis.

Back home, Americans gave everything they had. Some 85 million bought war bonds. The top income tax rate hit 94%, the highest in US history. Even ordinary people paid more and more income tax to support the war effort.

This was the absolute peak of American patriotism and record high tax rates. And yet overall government tax revenue still only came to just 20.5% of GDP.

This matters. In the eight decades since the end of World War II, tax revenue in the United States has averaged between 17% and 18% of GDP… with very little variation.

The low was 14.2% in 1950, coming out of a recession, and the high was 20.0% in 2000, at the peak of the dot-com boom when capital gains tax rates were through the roof.

Yet throughout those eight decades, the overall average has remained quite steady— 17% to 18%… even though corporate and individual tax rates have been all over the board over the same period.

The reason is simple: as tax rates go up and down, people and businesses adjust their behavior. If marginal tax rates skyrocket, people stuff their earnings into tax shelters. Or they defer revenue. Or they come up with any number of ways to legally reduce what they owe.

It’s human nature.

You probably heard that the US national debt just crossed $40 trillion yesterday. And on its current trajectory, there is no end in sight to the growth of that debt.

The federal government now routinely posts ~$2 trillion annual deficits… during periods of relative peace and prosperity.

Plenty of people (especially on the left) believe the answer is to tax the rich: sky-high marginal rates, wealth taxes, etc. But the historical data show that higher tax rates cannot and will not solve the problem.

According to IRS data, imposing a tax rate of 90% on people earning $2MM per year or more would theoretically generate $200 to $300 billion in additional tax revenue.

But remember human nature: people would very quickly change their behavior and restructure their affairs, and so the real additional tax revenue would collapse to less than $50 billion per year.

The same goes for a wealth tax. Charging billionaires and centimillionaires a percentage of their unrealized gains sounds like a nice idea to a socialist. But the consequences would offset most (if not all) of the additional revenue.

If Elon Musk were forced to sell 10% of his stock to pay a wealth tax, the share prices of Tesla and SpaceX would plummet.

Sure, the IRS would collect more money from Musk himself. But, nationwide, overall capital gains tax revenue would fall dramatically. So net tax revenue would barely budge.

The point is there are always consequences to raising taxes: less economic activity, slower growth, and higher unemployment. No country in history has ever taxed its way to prosperity.

What’s crazy is that an economy as large and dynamic as America’s doesn’t even need to run a balanced budget. Even a $1 trillion annual deficit would be OK— and a huge step in the right direction. The national debt would still grow, but as a percentage of GDP, it would shrink.

And it’s not hard to get there. The low-hanging fruit is obvious: the Government Accountability Office, the federal government’s own watchdog, estimates that hundreds of billions of dollars are lost to outright fraud and theft every single year.

Yet Congress doesn’t seem to want to even try to eliminate obvious fraud.

And that’s the easy stuff.

The harder part would be streamlining government operations and cutting waste and inefficiency… which could easily generate hundreds of billions in savings.

Harder still would be reforming entitlements, fixing immigration, and taking a chainsaw to the Code of Federal Regulations… all of which could trim spending and/or grow the economy (and hence increase tax revenue).

Again, the national debt is $40 trillion, yet Congress won’t even do the easy stuff to fix it. Even worse, the media and the courts actively block and obstruct the people who do try.

We can hope that common sense will one day prevail, and that AI and nuclear power will supercharge the US economy to the point where America grows its way out of debt.

But in the meantime, there are now 40 trillion reasons to have a Plan B.

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