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You may have heard the old saying, “When is the best time to plant a tree? Twenty years ago. The second best time is now.”

When might have been the best time to address the insolvency of Social Security and Medicaid/Medicare, along with the growing national debt? More than twenty years ago, but now will have to suffice. Actually, a nation, like a family, should always mind its debt and plan for the future, particularly in times when the economy is growing, even if sluggishly.

The U.S. is $38.6 trillion dollars in debt (and growing), and bipartisan groups like the Concord Coalition and the Bipartisan Policy Center, along with a slew of economists, are warning of a fiscal crisis that could increase inflation and stagnate the economy.

With its power of the purse, Congress is the crowd in the math classroom. They need to work together to figure out how pay for the future, when increasing percentages of the U.S. budget are being floated on credit.

If you dump 100 pennies on a table and ask a roomful of kids to “build the federal budget,” the problem facing the United States suddenly becomes painfully clear. The federal budget is not a single pot of money but roughly 20 distinct “functions,” from national defense to Social Security, Medicare, and net interest. Each function cuts across agencies. For example, science shows up in NASA, NSF, and the Department of Energy, while health research at NIH is grouped with other health programs.

Indiana State Senator Spencer Deery (R-23), whose district covers part of Montgomery County sent a letter to constituents saying that Indiana’s experience shows it does not have to be this way. “At the start of 2005, Indiana had not had a balanced budget in eight years, and the deficit was nearly $800 million,” he notes. [SG1] Two decades of “strong fiscal leadership” later, the state has recorded balanced budgets, shrinking debt, and “still room for multiple tax reductions,” even while paying down its largest unfunded pension liability, the Pre‑1996 Teachers Retirement Fund. That fund is now on track to be fully stabilized by 2030, which will free up as much as $1 billion a year for other priorities—a reminder that discipline today can create room for opportunity tomorrow.

By contrast, Deery warns in his recent newsletter that “the federal government is moving in the opposite direction.” With roughly $8 trillion of our national debt held by foreign investors, including more than $1 trillion by Chinese interests, he sees a trajectory that “threatens our national security, weakens our economy, and creates uncertainty for states like Indiana that depend on federal partnership.” That is why he co‑authored Senate Resolution 51, urging action on the federal debt crisis, and why he is willing to break his own norm about commenting only on state issues. “The longer the federal government waits to act, the harder it will be on all of us when we are forced to fix the issue,” he writes, calling on Congress to “run its budget more like Indiana runs ours.”

State legislators like Deery aim to influence federal legislators to not miss the moment. It’s a worthy call.

Economist Joe Tracy, contributor to Purdue’s Daniels Insights, recalls that there have been missed opportunities—modest reforms from the 1981 Greenspan Commission “bought time” but were never followed by the deeper structural changes.

“We lost all this time to deal with Social Security reform, Medicare, Medicaid,” he says of the debt, which has been ballooning. The result is that those social safety net programs are now some of the central drivers of spending growth, yet remain politically untouchable.

Tracy is particularly blunt about timing: “The biggest, most consequential challenge facing the United States over the next 30 years is the deficit, and it is almost beyond belief that the deficit is this high outside of a major war and when the economy is doing well.” Good times, he argues, are exactly when governments should be paying down debt, building “rainy day” reserves, and getting ahead of demographic pressures.

For an extended period, the U.S. enjoyed low interest rates, which led to talk of “free money,” referring to the near-zero interest rates after the Recession.  “There seems to be no sense of any urgency by people in D.C. over this,” said Tracy, even as interest rates climb, leading to rising interest costs that compound with the overspending.

At present, a quarter of the U.S. budget is based on credit. Imagine a hundred pennies, 25 of which are wrapped in red tape, representing borrowed money. If interest rates go up, the debt increases, and more and more pennies get wrapped in the red tape of deficit, no longer money America owns outright.

The arithmetic is daunting, but the politics may be worse. Tracy sees a deficit not just of dollars but of will. He points to gerrymandered districts that reward ideological purity over problem‑solving and to a Congress where members “just fly in and out” rather than building the relationships that make bipartisan deals possible. He half‑jokes that we might need to “buy a dormitory” and make members live together again, recreating the social fabric that once supported cross‑party cooperation.

Tracy sketches constructive ideas for building a more fiscally responsible environment. One is to make federal programs temporary by default: give new agencies an expiration date and require Congress to affirmatively renew and reform them, rather than allowing them to run forever on autopilot. Another is to reconsider the tax structure—he suggests that a broad, flatter tax with fewer carve‑outs would force every voter to have “skin in the game” when new spending is proposed, reducing the temptation for politicians to promise benefits while assuring most people “you won’t have to pay for it.”

Indiana’s experience suggests that better outcomes are possible when leaders and citizens accept trade‑offs, commit to paying for what they want, and insist on measuring what works. Deery’s balanced budgets and shrinking pension liabilities show what sustained discipline can accomplish at the state level; Tracy’s analysis explains why national leaders must use times of prosperity to confront hard questions to repair Social Security and health care. The fiscal crisis facing the United States is, at its core, the same challenge—only this time, the red‑taped pennies belong to our children and grandchildren.