On July 4th, 2025, just weeks before we finalized this issue of Point/Counterpoint, President Trump signed the One Big Beautiful Bill into law. While estimates vary, most suggest provisions will result in more than a $3 trillion increase in the national debt. Aside from general concerns about shifting costs to future generations, some analysts worry about rising risks of a debt crisis—the potential for a loss of faith regarding the U.S. government's commitment to repayment abruptly destabilizing markets.
Louise Sheiner's and Kent Smetters's essays in this issue provide a very timely assessment of debt levels and associated risks. Their exchange provides a window into the policy and technical judgments that inform alternative estimates of the likely trajectory of U.S. national debt and its consequences. Sheiner's relative optimism rests not only on relatively lower debt levels estimated by, e.g., the Congressional Budget Office, but also on expectations regarding the time and capacity for policymakers to make adjustments to avoid a debt crisis. Smetters argues that higher estimates derived from alternative models are superior, and demonstrate that a debt crisis is a greater, and more imminent, threat. Their exchange highlights the complexity of the technical estimation issues—both the models used, and their specifications—as well as judgments regarding the broader context in which the resulting estimates must be evaluated.
Current U.S. law mandates notification of substance-affected infants to state child welfare systems (CWS) for the purpose of assessment and service connections. Yet, CWS appears to identify a small share of substance-affected infants at birth, potentially reflecting inconsistent diagnosis of prenatal substance exposure (PSE) and emerging efforts to limit toxicology testing. This study uses linked maternal and child administrative records (2015 to 2021) for Pennsylvania Medicaid-covered births with CWS cases by age 3 (N = 31,913) to investigate PSE prevalence. Using indicators from CWS records and both child and maternal Medicaid claims, we estimate that 45% of children involved with CWS by age 3 experienced PSE, as well as 59% of children entering foster care. Nearly half of these children were not involved with CWS at birth and a majority did not receive a medical diagnosis of PSE. Yet, extrapolated estimates suggest that 70% of Medicaid-covered children with a PSE indicator will experience a CWS case by age 3. Absent high uptake of robust supportive interventions from other systems or agencies, avoiding notification of PSE at birth may not reduce long-term involvement with CWS among children with PSE.
The literature remains mixed on the extent to which medical malpractice reforms affect physician overuse of procedures (i.e., “defensive medicine”). We bring new evidence to this discourse by examining a recent reform in North Carolina that introduced caps on noneconomic damages. We focus on a setting where malpractice risk is high and service intensity is strongly subject to physicians’ discretion: obstetrics care. Comparing discharge data from North Carolina to Florida, we show that caps on noneconomic damages causally reduce the likelihood of a cesarean delivery by, on average, 5%, with the effect size nearing 7% five years post-policy implementation. Physicians also substitute away from other intensive procedures such as vacuum and forceps deliveries but maintain control over the timing of births by increasing medical inductions. Our findings suggest that the reduction in cesarean deliveries due to North Carolina's damage caps can reduce annual spending by approximately $4.6 million.
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