Former Treasury Secretary Paulson Warns on National Debt
Hank Paulson argues that the rising U.S. debt burden threatens national security and long-term economic prosperity.
Updated on Oct. 29, 2026 in Economic Policy
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Former Treasury Secretary Henry Paulson warns that the growing U.S. national debt poses a severe risk to the nation's economic stability and security. He calls for significant revenue-raising measures to address the burden.
Why it matters
Paulson contends that the current debt trajectory will eventually stifle economic prosperity and could trigger a future financial crisis. He advocates for policy changes to preserve national security and economic health.
The U.S. national debt currently stands at $40.6 trillion, or approximately $119,000 for every citizen. Annual interest payments on this debt have now surpassed $1 trillion.
The players
Henry Paulson
He is a former Treasury secretary who previously served as the CEO of Goldman Sachs.
The details
In a speech in New York, the former Treasury chief and Goldman Sachs CEO recommended closing tax code loopholes and implementing a value-added tax to increase federal revenue. He also criticized the use of unpredictable tariffs on U.S. allies as a strategy.
Timeline
Henry Paulson served as Treasury secretary from 2006 to 2009.
The bank bailout program spearheaded by Paulson in 2008 totaled $700 billion.
Paulson delivered his remarks at the Economic Club on October 29, 2026.
Macro View
Comparing current debt levels to the 2008 bank bailout program provides a historical benchmark for how the government addresses systemic financial risk. This analysis follows long-standing debates regarding fiscal sustainability compared to historical economic cycles.
Rising debt levels often lead to debates over tax policy and government spending that can directly impact household budgets. Readers should track potential changes to tax code loopholes as policymakers look for ways to generate new revenue.
The takeaway
The warning underscores the long-term trade-offs between deficit spending and national economic security. Implementing broad tax reforms remains a central, albeit contentious, proposal for curbing the national debt.
Further reading
For more on fiscal trends, visit the Economic Policy section.
Source note: This article includes information reported by American Banker.
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