Socialism is the subject of much talk in the United States, fueled by would-be Democratic presidential candidates who lean toward some version of that socioeconomic model -- and polls in which many voters sympathize with that view.

As someone who has witnessed varieties of socialism in Latin America and Europe, I think the real danger in the United States is not the ideological radicalization of the Democratic Party, the political conversion of millions of Americans, or the emergence of a viable socialist party on a national scale. Rather, the real danger is the impact that the country’s intractable structural problems could have on people’s idea of how capitalism works. 

We have already seen how the financial crisis of 2008, the government’s ensuing rescue of major corporations, the prolonged recession, and the temporary dislocations brought about by globalization have fueled illiberal populism, right and left, in recent years. Many people blame market capitalism for the failure, a decade ago, of a system in which government intervention -- specifically, a politically engineered credit boom -- played a much bigger role than free enterprise. Given that the last 10 years have seen a major boost to financial assets and corporations (again, through monetary easing and other interventionism) while part of the middle class was painfully reducing its debts, it is likely that the next crisis and recession will reinforce the notion that what is failing is the free market. 

We have learned that the U.S. budget deficit grew 15 percent in the first half of fiscal 2019: between October and March, expenses exceeded revenue by almost $700 billion. Contrary to widespread perceptions, the reason had little to do with tax cuts and revenue -- which actually grew 1 percent while spending grew 5 percent.

The Treasury has released its 2018 financial report, and it isn’t pretty. Although in recent years the government’s primary deficit (not counting the servicing of the debt) has tended to go down and growing interest payments seemed to be the main problem, projections indicate that both are now headed in the wrong direction.  The crux of the matter is the unsustainable commitments the U.S. government has made and refuses to pare down. We tend to talk of the U.S. debt as equivalent to 100 percent of GDP, but that proportion will be dwarfed in the not-too-distant future if nothing changes soon. The debt will double in less than three decades if we leave out government-sponsored entities --such as Freddie Mac; if we include them (which, of course, we should), the doubling will occur much sooner.

The Treasury has also calculated the net present value of future liabilities (essentially Social Security, Medicare, and Medicaid) to more realistically estimate the debt. If we take that into account, we are talking about five times GDP. 

Various studies have projected expenditures to exceed revenues in one of the Social Security trust funds as soon as 2022, and one of the Medicare trust funds has been running a deficit for several years; it will likely be depleted by 2029.

By way of consolation, the United States is not alone. The net present value of pension liabilities amounts to several times GDP in many European countries (more than three times in Germany, France, the United Kingdom, and Italy). None of this has anything to do with the free-enterprise capitalist system -- quite the opposite. But the populist and, dare I say, socialist zeitgeist in which this crisis of government is taking place will push millions of people to lose faith in markets as the prime drivers of prosperity and social mobility when these imbalances come to a head and produce the inevitable financial and economic disruptions; that is, unless a consensus develops among decisionmakers about the urgent need to attack the statist root of the problem.

Alvaro Vargas Llosa is a senior fellow at the Independent Institute. He is the author of Global Crossings: Immigration, Civilization and America.