Hi folks!
Today I’m feeling a little “Debbie Downer”-ish, and being the generous fella I am, I thought I’d share my pain with you fine folk.
My angst today is because of the “milestone” we’re about to hit. Pictured above is a dandy little lapel-pocket-sized Debt Badge I bought from Thomas Massie. And according to it, the US government is about to be $40 trillion in debt.
Unfunded entitlements and seemingly unavoidable empire-supporting military expenditures increase this problem much much more, of course. But paying just the interest on this debt costs over $1 trillion annually.
That’s at current historically low interest rates of around 3.4%. What happens if rates tick up a bit? Well, we’ll see, because they already have. That figure was for existing debt. It’s higher on new issues. What happens if interest rates soar?
Maybe we can start to get a handle on the debt by cutting spending.
Ha ha ha ha ha! Yeah, right.
Spending for 2025 was around $7 trillion. 2026 is projected to be around $7.5 trillion. We aren’t slowing spending down — let alone cutting it.
We’re speeding up.
Over $4 trillion of that is entitlement spending. They literally call that “mandatory”. It won’t be cut. Around $1 trillion is defense spending — and Trump just called for the new budget to be $1.5 trillion. No cuts there either.
All the rest of the government spending you’re accustomed to seeing (around $2 trillion) is what’s called “discretionary”. That term is a lie, of course. DOGE failed. Nothing significant will be cut. The budget will continue to rise. The debt will rise even faster.
You and I and everybody else just float through our days, seemingly oblivious to this problem. We worry about our local sports team. We get enraged at various incidents and outrages in the culture war. We worry about our children on multiple fronts — and we should.
But we rarely spend much time worrying about the debt. Perhaps it’s because the problem is too big. We can’t wrap our minds around it.
Also, it’s intractable. Assuming we gather up the courage and fortitude to address the problem, what on earth can we do about it? There is literally zero political will to even slow down the spending increases, let alone cut anything.
As I said, today I’m Debbie Downer. I have no white pills for you.
I do think we should all wake up and acknowledge the problem, though. To that end, I’m going to share two recent crossover episodes I did with my favorite economist, the great Bob Murphy.
The first is on the debt. The second is on what’s coming because of it.
Enjoy?
Naturally,
Adam
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