DEFYING THE ODDS, U.S. households managed to add $13.5 trillion in wealth last year, according to the Federal Reserve; the biggest increase in records going back three decades.

Americans are coming out of the pandemic buying, buoyed by savings and federal stimulus. The U.S. economy, turbo charged by stimulus worth almost $6 trillion, is hungry for a wide range of goods produced here and around the world.

There is a delicate balance between causing a strong economic recovery and causing a wave of inflation which could make matters worse as the economy is flooded with watered-down currency. Many economists fear a wave of inflation is coming and they need to know what central banks are going to do.

While limiting outside activities during the pandemic, many Americans paid off credit card debt, saved more and refinanced into cheaper mortgages. They benefited from the government borrowing, lending and spending trillions of dollars to keep the economy from tanking.

Many white-collar employees were able to work from home, saving money by not commuting or eating out and saving on child care. They benefited from stimulus checks, expanded unemployment benefits, postponed mortgage and student loan payments.

Home values, stocks and retirement accounts soared in value. Those who continued to work, including essential workers, often worked overtime while collecting the stimulus checks. The stock market was a driver of the household wealth gain, accounting for nearly half the total increase, said the Federal Reserve. More than 70% of the increase in household wealth went to the top 20% of income earners; about 30% went to the top 1%.

Not as fortunate were millions of lower-income workers. Millions of low-wage jobs were eliminated or will be slow to return as the economy recovers.

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THE NEWS is not all good. It’s become all too clear that America can’t build a sound economy on a foundation of unsustainable debt. According to Congressional Budget Office’s (CBO) baseline projections, interest costs on the soaring debt will surpass spending for Social Security by 2045, and will consume nearly half of federal revenue in 2051.

It appears our financial train has run off the cliff and is free-falling. Our options are bad and worse. Cutting spending isn’t a realistic political solution and raising taxes has its limits. What could go wrong?

We’ve been warned many times. In 1994, President Bill Clinton named the Bipartisan Commission on Entitlement and Tax Reform chaired by former Sens. Bob Kerrey, a Democrat, and John Danforth, a Republican, to study the future of Social Security, Medicare and Medicaid.

There was a near unanimous agreement that the entitlements were on an unsustainable trajectory, but reforms were impossible because of politics. At that time, the budget deficit was $203 billion and the national debt was a mere $3.4 trillion.

Today, the nonpartisan CBO estimated annual budget deficits will exceed $1 trillion and will be near $2 trillion in 10 years. The national debt is approaching $30 trillion, with no end in sight. The unfunded liabilities for Social Security and Medicare are approaching $70 trillion and the shortage is skyrocketing.

An Ipsos poll taken in late April found that 75% of Americans believe too much debt can hurt the economy. Despite the urgency of the problem, Kerrey and Danforth said nearly every elected official in Washington is an original cosponsor of the “do nothing” plan.