Get yours HERE! And many more in the Merch Shop!
Everything Old is NEW Again (in the Merch Shop)!
Tag: debt
The Number That Should Keep Every American Parent Up At Night
Washington’s spending addiction just reached a new record. According to the Congressional Budget Office, the federal deficit for the fiscal year ending on September 30 will hit a stunning $2.1 trillion. This number, confirmed in the CBO’s August monthly budget review, is the highest deficit recorded outside of the years of emergency COVID spending.
The numbers say something that neither political party wants to broadcast. Even with the economy improving, federal spending jumped 5% while revenue only grew 3%. Adding to the structural imbalance, interest on the national debt jumped by 14% compared to the previous year. Spending on defense, Social Security, Medicare, and Medicaid is also up. The government borrowed $431 billion in the month of July alone — an average of $6 billion every single day.
“We’ve borrowed an astounding $1.8 trillion this fiscal year, with $431 billion in the month of July alone, equating to nearly $6 billion per day,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “We’re on track to surpass $2 trillion in borrowing this fiscal year despite not being in a recession. That is not normal.”
The CBO’s original estimate was $1.9 trillion — revised upward by $200 billion largely because the Supreme Court struck down tariff authorities in February, cutting expected revenue by $250 billion. About $100 billion has already been refunded to companies under court orders. Even with new tariffs imposed since, the fiscal math still does not add up.
The Medicaid waiver system shows just how embedded the waste is. Congress baked a budget-neutrality requirement — Section 71118 — into last year’s reconciliation law, requiring that starting January 2027, no Medicaid waiver can be approved without a certification it will not increase federal spending. States have spent years exploiting these waivers to extract billions beyond what their programs justify. A 2014 Government Accountability Office audit found $778 million in excess spending on a single Arkansas Medicaid waiver — money the Obama administration used to bribe the state into expanding Obamacare.
$40 Trillion in Debt and the Interest Bill Keeps Growing
The United States has crossed $40 trillion in gross federal debt, and Washington will treat it as another unfortunate milestone before returning to the business of spending money it does not have. The more immediate problem is what it costs to carry that debt. Treasury’s figures show approximately $1.17 trillion in gross interest expense through July, just ten months into fiscal year 2026. That works out to roughly $117 billion a month, or $3.85 billion every single day over that period. These are interest costs, not repayments that reduce the principal. Washington incurs this expense while the debt itself continues climbing.
There are two different interest figures, and they should not be confused. Treasury’s gross interest expense includes interest credited to government accounts holding Treasury securities. The federal budget’s net interest measure excludes those internal payments and includes other offsets. The Congressional Budget Office’s February outlook placed net interest at approximately 3.3% of GDP in 2026, implying more than $1 trillion for the full fiscal year. Even on that narrower measure, Washington is devoting roughly one dollar in five of projected federal revenue to interest. The distinction matters for accounting, but neither number describes a government bringing its finances under control.
The issue was never simply that government had borrowed a large sum. It was that borrowing had become a permanent arrangement, with interest added to budgets already running deficits. Politicians take credit for the original spending, while the cost of financing it survives long after they leave office. Their successors inherit the bill and issue more debt rather than confront the promises that created it.
Consider what refinancing actually means. When a Treasury security matures, its holder must be repaid. If Washington finances that redemption by selling another security, the creditor has changed, but the government has not eliminated the obligation. It has renewed it at whatever rate the market will accept. Borrowing to refinance principal is separate from the interest bill, yet both require continued access to willing buyers. This is why a government can make every payment on time while its underlying financial position deteriorates.
The mathematics of higher rates becomes brutal at this scale. Every additional percentage point on $1 trillion of debt means another $10 billion in annual interest once that debt carries the higher rate. Apply that to successive waves of refinancing and the expense builds year after year. The entire $40 trillion does not reset overnight, and it would be misleading to suggest otherwise. Existing fixed-rate securities retain their coupons until maturity. That delay, however, can conceal the developing burden and give politicians another excuse to postpone action.
There is no magic number at which a country automatically collapses. Confidence, borrowing costs, economic growth, and the ability to raise revenue all matter. The danger is that higher interest expenses require more borrowing, while concerns about that borrowing encourage investors to demand still higher yields. A deteriorating fiscal position can then begin reinforcing itself.
CBO projects net interest costs reaching $2.1 trillion in 2036, or 4.6% of GDP. That is a projection under its stated assumptions, not a guaranteed outcome, but it demonstrates that the problem does not disappear even in an orderly baseline. Washington is not merely struggling with a temporary expense left over from an emergency. It is carrying an interest burden expected to grow while elected officials continue making commitments against future revenue.
War makes this arithmetic harder. Military operations require resources today, while the interest on borrowing to finance them can remain for decades. If conflict also raises energy costs or disrupts production, it can complicate the Federal Reserve’s inflation problem. Higher rates may be necessary to restrain inflation, but they also increase the cost of new federal borrowing. Demanding that the Fed cut rates does not repair that conflict, especially when long-term investors remain free to demand compensation for inflation and fiscal risk.
Republicans cannot explain this away by blaming Democratic spending while defending every unfunded commitment of their own. Democrats cannot promise an expanding government without confronting the cost of financing it. Both parties have constituencies they refuse to disappoint and obligations they prefer to leave to the next administration. The interest bill does not recognize party affiliation, and the bond market does not have to accept a campaign promise as repayment.
The $40 trillion figure should therefore be understood through the income required to sustain it. America possesses enormous productive capacity, but that is not permission for Washington to claim an ever-larger portion of future revenue before the public receives any new service. More than a trillion dollars in annual net interest is already a substantial claim on that income. The question is how much further government intends to mortgage the future before admitting that borrowing has become its substitute for governing.
The $29 Trillion Debt Rollover Nightmare
Governments and corporations are expected to borrow a record $29 trillion from global bond markets in 2026, according to the OECD. That is $4 trillion more than in 2024 and twice the amount borrowed only ten years ago. The financial press will present this as evidence that debt markets remain deep and resilient, but 78% of the borrowing by OECD governments will not finance new roads, productive industry, or economic expansion. It will be used merely to refinance debt that already exists.
This is the Ponzi structure underlying modern government finance. Politicians speak as though debt is repaid, but governments almost never repay the principal. When a bond matures, they issue another bond to obtain the money needed to redeem the first one. They then borrow still more to finance the current deficit and increasingly borrow to pay interest on the debt accumulated by previous administrations. The entire system functions only while investors remain willing to roll the obligations forward.
The $29 trillion figure is annual borrowing, not the total amount of outstanding debt. Sovereign and corporate bond markets combined have already reached approximately $109 trillion. The system must therefore absorb an enormous wave of new securities every year merely to prevent old promises from defaulting. This is why the refinancing cycle matters far more than the political debate over whether a technical default will occur. A government can continue paying every bondholder on time while still entering a debt crisis if refinancing costs rise beyond what its tax base can sustain.
Politicians became addicted to short-term debt because it was cheaper than locking in long-term interest rates. The OECD reports that 30-year yields have risen significantly across most countries since 2022, leading governments and companies to issue more short-maturity debt. This lowers the interest bill temporarily but forces borrowers to return to the market more frequently. They are trading today’s discomfort for tomorrow’s crisis because nobody in government wants to admit the actual cost of decades of fiscal mismanagement.
A nation that finances itself for thirty years is protected from immediate changes in interest rates on that debt. A nation that continually borrows at short maturities must refinance again and again at whatever rate the market demands. When confidence falls, the cost resets quickly across the debt structure. A one-percentage-point increase may appear insignificant to some bureaucrat, but applied to trillions in recurring issuance, it consumes hundreds of billions that must be extracted through higher taxes, reduced services, inflation, or still more borrowing.
Central banks are also reducing their government-bond holdings after years of manipulating rates through quantitative easing. This leaves hedge funds, households, and foreign investors to absorb a growing supply of debt. These buyers are more sensitive to price and are not obligated to rescue politicians from their own stupidity. If the yield does not compensate them for inflation and political risk, they will demand a higher return or move their money elsewhere. Government calls this market instability because it cannot stand the idea that its debt should be priced honestly.
The competition for capital is becoming vicious. Governments need money for welfare states, pensions, military expansion, energy subsidies, industrial policy, and the interest on existing debt. Corporations must refinance their own obligations while funding new investment, and the artificial-intelligence race is adding another enormous borrower to the market. Nine major technology companies are expected to issue approximately $1.2 trillion in bonds between 2026 and 2030 as they pursue a combined $4.1 trillion in capital spending. Every dollar absorbed by government debt is capital that cannot finance productive private investment without pushing rates higher.
War will make this rollover crisis far worse. Governments are expanding defense budgets while rebuilding supply chains, stockpiling strategic resources, subsidizing domestic manufacturing, and attempting to reduce dependence on geopolitical rivals. These expenditures are being added to budgets that were already insolvent before the War Cycle turned higher. They are preparing for a global conflict with borrowed money while the cost of that money is rising.
This is why the Sovereign Debt Crisis will not resemble the 1930s or some dramatic bankruptcy proceeding. Governments that borrow in their own currencies can create the money necessary to make nominal payments, but they cannot create purchasing power. They will repay creditors in depreciated currency, force financial institutions to hold public debt, suppress interest rates below inflation, impose capital controls, and search for new ways to trap private savings inside the system. Default will come through the destruction of the currency and the confiscation of wealth rather than a polite announcement that the Treasury has missed a payment.
The movement toward CBDCs and tokenized bonds must be understood within this context. Governments facing a record refinancing burden will want a financial system capable of identifying capital, controlling its movement, and directing it toward approved assets. They will say digital money improves efficiency and tokenized debt provides instant settlement. What they will never advertise is that the same infrastructure can prevent capital from escaping when investors no longer wish to finance the state voluntarily.
The OECD recommends that governments ensure the “long-term sustainability” of their debt, as if politicians who created this disaster will suddenly discover restraint. They will not cut spending until the bond market forces the issue because every expenditure has a constituency and every reform threatens someone’s election. They will raise taxes, manipulate markets, change accounting rules, and blame speculators long before admitting that government itself has become the greatest threat to financial stability.
The world must absorb $29 trillion in borrowing during 2026 while war expands, rates rise, central banks retreat from bond markets, and private industry competes for the same capital. The system remains functional only because confidence has not yet completely broken. Once investors question whether rolling government debt forward is worth the risk, the refinancing machine will seize. Governments do not have $29 trillion sitting in a vault to repay these obligations. They have only the ability to borrow again, tax the public, or destroy the value of money.
The Entire Financial System Is Chained to Government Debt
The Bank for International Settlements is warning that near-record public debt and the growing role of hedge funds and other nonbank financial institutions have created what it calls a “fiscal-financial stability nexus.” That is sanitized bureaucratic language for a system in which governments, banks, pension funds, insurers, hedge funds, and central banks are all chained to the same mountain of sovereign debt. If government bonds begin to fail, the losses will not remain confined to some account at the Treasury. They will spread through the institutions holding the public’s savings and eventually force central banks to choose between the currency and the financial system.
Government debt is treated as the foundation of modern finance. Banks use sovereign bonds as collateral, pension funds hold them to match future obligations, insurers depend on them for income, and hedge funds trade them using enormous leverage through repurchase markets. Regulators assign government debt privileged treatment because they have declared it “risk-free,” but no investment is free of risk. The label exists because government needs financial institutions to purchase its bonds, and admitting that sovereign debt can become unstable would expose the fraud supporting the entire system.
The BIS estimates that the probability of a financial-stress event comparable to the Global Financial Crisis occurring within three months is roughly ten times higher when public debt relative to GDP is elevated. The probability rises from approximately 0.3% under lower-debt conditions to 3.8% when government debt is high. The risk increases further when nonbank financial institutions hold a larger share of the market because many depend on leverage and short-term funding that can disappear the moment bond prices move against them.
This is how a routine selloff can become a systemic event. Government bonds decline, yields rise, and leveraged funds suffer losses. Lenders demand additional collateral, forcing those funds to sell more securities into a falling market. Liquidity disappears, borrowing costs surge, and the losses spread to banks and other institutions connected through funding markets. Government then complains that the market is “dysfunctional” because investors are no longer purchasing its debt at politically convenient prices.
The central bank is forced to intervene because allowing the bond market to clear naturally could bring down the financial system. It purchases government securities, supplies emergency liquidity, and claims that the operation is temporary and has nothing to do with financing the state. Yet every rescue teaches the market that excessive leverage will be protected and teaches politicians that reckless borrowing carries no immediate consequence. This creates the next crisis by encouraging the exact behavior that caused the first one.
The BIS openly admits that repeated central-bank interventions can weaken market discipline over government spending. This is the vicious circle they cannot escape. Governments borrow excessively, bond markets become unstable, central banks suppress the instability, and politicians interpret the rescue as permission to borrow even more. The debt increases until each attempt to restore honest interest rates threatens the banks, pensions, and funds that were encouraged to hold it.
Will WAR Bankrupt the West?
War and sovereign debt are merging into a vicious spiral that will determine which nations survive the coming monetary crisis. Governments entered the conflicts in Ukraine and Iran, along with the escalating confrontation between the United States and China, already buried beneath debt accumulated through decades of fiscal incompetence. Now they are increasing military spending, subsidizing domestic industries, restructuring supply chains, and borrowing even more money to prepare for conflicts their own foreign policies helped create.
The United States, China, France, the United Kingdom, and Japan already carry gross government debt exceeding an entire year of economic output. Russia has drained much of its National Wealth Fund to finance the war in Ukraine while Western governments froze approximately $300 billion in Russian sovereign assets. Gulf states are being forced to expand defense spending amid the conflict with Iran, and Europe has committed itself to raising NATO-related expenditures toward 5% of GDP by 2035. Trump wants to increase annual US defense spending by $500 billion to reach $1.5 trillion, but Washington is already borrowing simply to pay interest on the debt it accumulated before this latest round of wars began.
These people speak about military spending as if the money materializes from thin air without consequences. Government does not possess wealth of its own. Every missile, drone, weapons package, foreign aid program, and military deployment must be financed through taxation, borrowing, or inflation. Taxation drains the productive economy, borrowing competes for private capital, and inflation silently confiscates purchasing power from everyone. Politicians choose debt because it conceals the cost until after the election, allowing them to play emperor today while leaving future generations with the bill.
The yield on the 10-year US Treasury has nearly tripled over five years to 4.3%, which means Washington is financing a vastly larger debt at far higher interest rates. This is elementary mathematics that the political class refuses to confront. A government may survive $10 trillion in debt when rates are near zero, but the same fiscal structure becomes impossible when the debt multiplies and borrowing costs normalize. Every additional dollar devoted to interest is a dollar that cannot maintain infrastructure, reduce taxes, or support genuine economic development. Government then borrows more to cover the interest, increasing the debt that created the problem in the first place.
The attempt to separate national economies from geopolitical rivals will impose another enormous cost. Europe abandoned cheap Russian energy and then wondered why its industries became uncompetitive. The West wants to reduce dependence on Chinese manufacturing and rare earths, but rebuilding those supply chains will require subsidies, tariffs, controls, and years of expensive investment. Iran’s position around the Strait of Hormuz demonstrates how quickly a regional conflict can threaten a route that previously carried roughly one-fifth of the world’s daily oil supply. Every attempt to create economic security through political coercion raises prices, reduces efficiency, and demands still more government borrowing.
Cloward, Piven, And Zinn Told Us They Wanted To Bankrupt America
remember when the National Debt Clock first went up. I don’t remember the exact day, and honestly, I thought it went up during Reagan’s second term, but I was wrong. I looked it up, and it went up on February 20, 1989, exactly a month after Reagan left office.
I’m certain my confusion came from the fact that, while Reagan was in office, all the Democrats could talk about was the national debt. And it was a big deal. In retrospect, the growth under Reagan was unprecedented, rising about 184% during his eight years, more than double that of Nixon and Ford combined (as a percent), four times that of Carter in one term, not to mention five times Clinton, and more than double Bush and Obama combined.
Now, of course, we all know why the debt ballooned so much under Reagan. Tax cuts and the military, especially Star Wars! That’s what the Democrats tell us.
Well, all of that, but really the most important thing was: Democrats. What did Democrats have to do with anything? Pretty much everything. Democrats, led by the liar/streetfighter/Speaker of the House, Tip O’Neill, never saw a government program outside of Defense that they wanted to cut.
Well, technically, to be fair, there was something else they didn’t spend money on…the border wall they promised Reagan in 1986 in exchange for his granting amnesty to 2.7 million illegal aliens. The illegals got amnesty, but Reagan never got the promised wall.
And so it goes.
That first clock clocked in at $2.7 trillion. Boy, does that feel like a long time ago! And it was. Back then, a trillion dollars actually meant something. Today’s Debt Clock just recently crossed the $40 trillion mark.
At some point, these numbers stop feeling real. We hear things like, if the government spent $1 million a second, it would take it over a year to spend $40 trillion, and other things we can’t quite wrap our heads around.
An easier way to think about it is this: In 1989, the $2.7 trillion National Debt worked out to about $11,500 per American. Today, at $40 trillion, that number has jumped to about $116,000 per person.
US plans $725 million payment towards its large UN debt
The Trump administration has informed Congress of its intention to pay $725 million to the United Nations, a congressional notification seen by Reuters showed, a move aid experts said was a welcome step towards paying billions in dues owed.
The administration has criticized the global body for not living up to its potential and slashed funding to many U.N. agencies. When asked about the planned payment, a U.S. official said any payments will be contingent on continued reforms of the organization and added that the U.S. has not transferred any funds as of Friday.
The allocation of funds – mentioned in an August 4 State Department notification letter to Congress that has not been previously reported – comes ahead of an expected speech by U.S. President Donald Trump to the U.N. General Assembly in New York next month.
‘It keeps the ship afloat a little longer’
U.N. Secretary-General Antonio Guterres said this year that the U.N. faced “imminent financial collapse” due to unpaid contributions from member states, and the global body has brought in large budget cuts.
“Over the past six months, the United States has achieved historic reforms across the U.N. – reforms long considered impossible – including the first real budget cut in U.N. history, resulting in nearly one billion in cuts,” a State Department official, responding to Reuters questions about the payment, said in an email.
In April, Devex, a development news agency, reported that the U.S. had set specific conditions for the release of funds, such as more cost-cutting and moves to counter China’s influence.More: U.S. debt set to hit $40 trillion months earlier than expected
The Trump administration has carried out an unprecedented shrinking of its federal government, saying it was bloated and has significantly cut back on domestic and foreign grants in an effort that it says was to put money into causes that aligned with U.S. taxpayer interests.
The $725 million would be less than 20% of the more than $4 billion that the U.N. said in May that the United States owed — though Washington has said that total figure is much lower and that it has made some payments.
Eugene Chen, a former U.N. official, said such a transfer would help pay U.N. salaries for a period, but might not cover them all. “It keeps the ship afloat a little longer,” he said.
$40tn debt: U.S. unhinged empire is a threat to world peace
The United States hit a dubious milestone this week, announcing that its national debt had exceeded $40 trillion. No other nation comes close to this level of absolute financial indebtedness.
This is not simply a matter of out-of-control financial bankruptcy. It is an ominous sign of an unhinged empire that is desperately trying to salvage its historic failure by scorched-earth tactics of endless war.
The world is being held hostage by a pathological system that is no longer tolerable for the sake of humanity, development and peace.
Perhaps of more significance than the total figure – astronomical though that is – is the accelerating pace of U.S. debt growth. Since 2016, the arrears have doubled, up from $20tn. Over the next decade, the U.S. national debt is predicted to climb to $64tn.
In the year 2000, the American account stood at a “mere” $6tn. The last quarter of a century has seen the arrears pile up from endless wars, reckless military spending, and massive tax cuts for the corporate elite. The debt has become irreversible under prevailing policies.
Servicing interest on the arrears now runs at $1tn a year and is one of the largest federal budget expenditures. This means that the United States is caught in a debt spiral from which it cannot extricate itself. It is digging a deeper and deeper hole.
There are profound implications for the United States as a society. As Robert Reich, a former Labour Secretary, noted, the servicing of runaway debt means less money for “schools, healthcare, roads and bridges and social safety nets.” The grim conclusion is that social inequality in the U.S. – already at record levels – will become even more destructive. That speaks of social immiseration and collapse.
There are also far-reaching detrimental impacts on the U.S. and global economy. Even mainstream commentators warn of a historic fiscal crisis pending for the United States from soaring interest rates and hyperinflation. That, in turn, will be transmitted to the rest of the world, especially those countries with large holdings of American debt.
But the exceptional U.S. financial mess is not just a matter of economics. It is an urgent issue of global peace and security.
There are several causes of mounting American debt. However, the main driver, by far, is that nation’s relentless warmongering and militarism, as economist Jeffrey Sachs and other commentators have long contended. It is systemic and chronic.
This year saw the United States celebrate its 250th anniversary since its founding as a modern state. For most of its history, about 95 per cent of the 250 years, the United States has been at war, either through conquest or subterfuge, according to its own Congressional records and eminent historians like David Vine.
No other modern nation comes close to this bellicose conduct, and that is a reason why no other nation comes close to the level of financial debt of the U.S.
I’m Sorry, The Feds Wasted HOW MANY TRILLIONS in Improper Payments?
Instead of drawing out the big mystery over how much of your money Washington wastes on improper payments, I’ll just tell you right up front: In the 20 years between 2003 and 2023, the Government Accountability Office (GAO) estimates the total money blown on payments made in error, or in the wrong amount, or with no documentation (!!!) is $2.7 TRILLION.
That’s a two followed by a seven followed by 11 zeroes. That’s almost double what we spent last year on Medicare/Medicaid combined, or on Social Security. It’s triple last year’s defense budget. It’s almost triple the unconscionable amount we spent last year just servicing Washington’s outstanding debt.
It is almost exactly the same amount Washington collected last year in personal income taxes. And if that doesn’t make your blood boil, you must be reading this inside a walk-in freezer, chewing on a mouthful of Lopressor.
The incomprehensible numbers come from a Cicero Institute report earlier this year titled “Rebuilding Public Trust by Ensuring Accountability in Government Spending.”
Dream on, right?
Hellbound and Down 
You must be logged in to post a comment.