That’s right: at least some Democrats believe capitalism is responsible for America’s $40 trillion national debt. Not expanding entitlements. Not politicians’ failure to pass or even pay attention to basic financial-literacy or budgeting. Not the left’s habit of promising voters everything now and figuring out how to pay for it later. No, according to them, it is all capitalism’s fault.
Melanie D’Arrigo, a Democratic political operative and former 2020 congressional candidate in New York, set off a social-media firestorm on Wednesday after she decided to blame the most productive economic system on the planet for the national debt.
The U.S. is $40 trillion in debt with capitalism.
— Melanie D'Arrigo (@DarrigoMelanie) October 14, 2026
Before the claim is debunked, it is worth considering what D’Arrigo might have meant. She could have meant it literally: that America’s economy revolves around credit, and because credit is a feature of capitalism, debt itself must be a capitalist invention. Although that argument doesn't hold up on its face.
Or she could mean something slightly more sophisticated: that capitalism has produced vast wealth inequality, forcing government to step in with entitlements to provide Americans with basic material security. And that the debt is a reflection of the spending that government must engage in to make up for capitalism's failures.
For now, let’s go with the latter, because it is at least more defensible.
Wealth inequality is a feature of capitalism. That much is true. What is conveniently left out is that it is a feature of economics in general. No socialist country, communist country, autarkic economy, or complex modern economy has ever eliminated wealth inequality entirely. Nor has reducing inequality even reliably improved living standards.
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Inequality is also a terrible measure in general. It is nothing but a measure of how much wealth sits at the top of a society relative to the bottom. It says nothing about whether ordinary people’s lives are getting better. Wealth is not the same thing as quality of life. A young American today may hold a relatively little total wealth compare to Elon Musk, yet enjoy a baseline quality of life, healthcare, technology, transportation, food, entertainment, and information, that would have been unimaginable even to the wealthy a century ago.
Why? Because capitalism’s focus is not on how much wealth someone has, but on making things that were once expensive and exclusive cheaper and more widely available. In other words things that are exclusive today won't be in the future.
But why do Democrats argue today that the federal government must guarantee entitlements? Because, they say, more people need access to healthcare, food, housing, and other basics right now. Still, these interventions fail at their stated goal. Rather than making essential goods more widely available, they distort the incentives that would otherwise drive down costs and expand supply. The result is not an end to scarcity or exclusivity or inequality; it is simply a change in who controls access to those goods, and who pays for it.
If government had stayed out of housing, health insurance, and retirement, standard of living, and accessibility to "basic goods" would likely be lower than it is today.
Unfortunately for D’Arrigo, that still leaves her with the harder question: how exactly did the economic system, rather than government, produce a $40 trillion national debt?
Capitalism, free markets, are the engine that have continually made goods cheaper and raised living standards across generations. The debt is the product of something else: a government that spends beyond its means, promises benefits it cannot fully fund, and then asks the productive portion of the economy to take the blame for the broken pieces.
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