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The U.S. Gamble With National Debt Makes Playing The Lottery Look Smart


I used to not understand why people buy lottery tickets. Couldn’t they do the math on what a poor investment playing the lottery is? I still don’t buy lottery tickets, but as I grew older and (hopefully) wiser, I realized that the math doesn’t really matter.

Most people buying lottery tickets aren’t expecting to win, but they still find pleasure in imagining how they would spend the money if they did, and they enjoy the flicker of hope that maybe, just maybe, they will win and their life will be transformed. The lottery really is played for entertainment. The pleasure of dreaming about winning is worth more to players than the cost of the tickets.

Consider the latest billion-dollar jackpot — it’s not real money to us, is it? That amount of lucre (filthy or otherwise) is beyond ordinary accounting. At some point it becomes fantasy. The first million or so is understandable.  It pays off student loans and the mortgage, buys some nice things, gives a big pile of money to church or charity, helps a family member in need, and adds a lot to the college fund and retirement account. In short, it buys a nice middle-class American life with a solid investment portfolio and no debt — ordinary life with more money. A million dollars is a lot for most of us, but it is still relatable.

But what happens when the winnings keep rolling in by the tens and hundreds of millions, even after the cruel revenue agents take their cut? Our desires tend to expand to the limits of our resources (and too often, beyond), but the transition from, say, saving to buy a high-end guitar to being able to buy the entire music store on a whim is the stuff daydreams are made of. There are smaller games and prizes, of course, but the big payouts sell a fantasy of fabulous, almost unimaginable (trying to imagine it is the point) wealth. The numbers are utterly disconnected from ordinary life.

This unreality of vast sums of money also explains our national carelessness regarding federal spending. The benefits people receive are comprehensible because the sums are those of normal life, but the amount of borrowing needed to provide them to millions of beneficiaries has become unimaginable. Social Security checks and Medicare benefits are real to people, while $20 trillion in debt (and counting) is not. Cutting benefits is tangible and alarming, but the deficit and accumulating debt are abstract to most people, and therefore easily shrugged off.

This indifference leads to ignorance and motivated reasoning. Everyone wants to believe that there is an easy fix to out-of-control spending, and that the only obstacles are special interests or the other political party.  However, the truth is that we are the problem. Our benefits are ordinary, even small, to us, but collectively they are large enough to bankrupt our nation.

Federal expenditures are dominated by the mandatory spending of popular entitlement programs. Most of the rest goes to the military and paying interest on the debt. The annual federal deficit is now larger than all non-military discretionary spending combined.

Government spending is popular; paying for it is less so. Thus, preserving programs for the poor, elderly and disabled is a vote-winner, but there is no constituency for acknowledging and acting on fiscal reality in order to make them sustainable. The only realistic budget fixes are cutting middle-class benefits or raising middle-class taxes. I would support doing both (gradually, to lessen the pain), but the odds of that happening are about the same as my chances of winning the lottery.

Republicans know that they should cut spending, especially if they are also cutting taxes, but they cannot campaign on that. The real money is in entitlement programs like Social Security, and reforming those programs is unpopular.

Meanwhile, the left’s answer for everything is to tax the rich more, but the increased revenue can only be spent once. Soaking the rich might balance the budget, or pay for free college tuition, or cover Medicare for all, or any number of other things, but not all of them together. Funding a generous welfare state requires heavily taxing the middle class, not just the rich.

Thus, both Republicans and Democrats are incentivized to ignore the problem and bash their opponents for any attempted reforms. The public wants low taxes and high spending, and it is getting it. One of these days we will all get it, good and hard. The relatively easy reforms that could be undertaken now will be passed over, and we shall face a worse reckoning later. Math is inexorable and the gods of the account books cannot be cheated forever.

But we want to believe. Maybe, just maybe, this time we’ll beat the odds that the dismal scolds keep pointing out. The lottery shows that people will spend money to have the dream of being the lucky winner who receives wealth beyond measure, but having to pay for the ordinary stuff of life is less fun, especially if there is a chance someone else can be made to cover it. And so voters punish politicians if they try to address the waking nightmare that our endless deficit spending will become. We would rather fund our fantasies than our responsibilities.

But the longshot we are really playing is not the lottery. It is the bet that a staggering national debt will never come due, that some deus ex machina will save us. As a nation, we’d rather be lucky than good, but we will end up being neither.