US national debt just topped $37 trillion and is growing fast.
Another Debt Milestone
The Peter G. Peterson foundation reports The United States is Adding to the National Debt Faster Than Ever
In the 2020s, the U.S. has added debt at a rate of $1 trillion every 5 months, more than twice the rate that has prevailed over the past 25 years. In part, recent debt accumulation reflects the significant deficit spending in response to the COVID-19 pandemic. Yet, in the face of a strong recovery and low unemployment, U.S. deficits remain substantially elevated and are projected to continue growing at a historic rate, while associated interest costs have overtaken all but Social Security as the nation’s largest expenditure.
Looking at recent history, by decade, the U.S. added $1 trillion to the Debt:
- Every 24 months in the 2000s, on average
- Every 11 months in the 2010s, on average
- Every 5 months in the 2020s, on average
Looking ahead, it is critically important for the nation’s leaders to prioritize fiscally responsible policies that put the country on a more sustainable path.
Unsustainable Path
Also consider America’s National Debt Challenge
The national debt is nearly as large as the entire U.S. economy and is projected to exceed its record high relative to the size of the economy in just 4 years, according to the Congressional Budget Office (CBO).
Why is our debt rising so dramatically? There is a fundamental imbalance between spending and revenues that will continue to grow in future years. CBO anticipates that federal spending will rise from 23.3 percent of GDP in 2025 to 26.6 percent in 2055, according to the agency’s March 2025 long-term projections. Revenues also are projected to increase during that period, but more slowly — from 17.1 percent of GDP in 2025 to 19.3 percent in 2055 — which means deficits will continue to rise in the decades ahead.
What’s Happening?
- 1) Aging Population: Over the next 25 years, the major driver of rising long-term federal spending is the aging of America’s population, as the number of people 65 or older will increase much faster than the working-age population, leading to increases in spending on programs for retirees.
- 2) Rising Healthcare Costs: The rising cost of healthcare in the United States is a key driver of the national debt. CBO’s projections anticipate that the federal government’s spending on major healthcare programs, such as Medicare and Medicaid, will climb from 5.8 percent of GDP in 2025 to 8.1 percent in 2055. Additionally, the Centers for Medicare & Medicaid Services note that total healthcare spending from all sources will grow to reach one-fifth of the entire economy. On a per capita basis, the U.S. healthcare system is the most expensive among other wealthy countries. Yet, America’s health outcomes are generally no better than those of our peers, and in some cases, are worse, including in areas like life expectancy, infant mortality, asthma, and diabetes.
- America’s fiscal health and economic strength are closely linked. The national debt is also an issue of fairness for the next generation. Young Americans will be saddled with the weight of decisions made by those that came before them, unless thoughtful, forward-looking fiscal decisions are made to strengthen the country’s economic future. A strong fiscal foundation creates conditions that encourage broad-based economic growth: an environment with greater access to capital, increased public and private investments, enhanced business and consumer confidence, and a solid safety net. In turn, those factors improve the lives of Americans by supporting a vibrant economy with rising wages and greater opportunity, productivity, and mobility.
Our Current Fiscal Path
- Debt is projected to continue to rise because there is a structural mismatch between spending and revenues.
- The national debt is nearly as large as the entire U.S. economy and is projected to exceed its record high relative to the size of the economy in just 4 years, according to the Congressional Budget Office (CBO).
- Why is our debt rising so dramatically? There is a fundamental imbalance between spending and revenues that will continue to grow in future years. CBO anticipates that federal spending will rise from 23.3 percent of GDP in 2025 to 26.6 percent in 2055, according to the agency’s March 2025 long-term projections. Revenues also are projected to increase during that period, but more slowly — from 17.1 percent of GDP in 2025 to 19.3 percent in 2055 — which means deficits will continue to rise in the decades ahead.
Key Drivers of the National Debt
- 1) Aging Population
- Over the next 25 years, the major driver of rising long-term federal spending is the aging of America’s population, as the number of people 65 or older will increase much faster than the working-age population, leading to increases in spending on programs for retirees.
- The first wave of the baby-boom generation has already reached retirement age. Americans are living longer, on average, which means that seniors will spend more years in retirement. In the coming decades, those factors will add substantially to the number of people supported by programs targeted to older Americans, such as Social Security and Medicare.
- 2) Rising Healthcare Costs
- The rising cost of healthcare in the United States is a key driver of the national debt. CBO’s projections anticipate that the federal government’s spending on major healthcare programs, such as Medicare and Medicaid, will climb from 5.8 percent of GDP in 2025 to 8.1 percent in 2055. Additionally, the Centers for Medicare & Medicaid Services note that total healthcare spending from all sources will grow to reach one-fifth of the entire economy.
- On a per capita basis, the U.S. healthcare system is the most expensive among other wealthy countries. Yet, America’s health outcomes are generally no better than those of our peers, and in some cases, are worse, including in areas like life expectancy, infant mortality, asthma, and diabetes.
- 3) Rising Interest Costs:As the national debt grows and interest rates rise, the United States will spend more of its budget on the cost of servicing that debt — crowding out opportunities to invest in the economy.
- 4) Insufficient Revenues: It would be one thing if the tax code were designed to fund all the promises made, but it is not. The U.S. tax system does not generate nearly enough revenues to cover federal spending. Furthermore, our tax code is also overly complex, confusing, inefficient, and unfair. For example, it remains riddled with tax expenditures, or “tax breaks,” that provide financial benefits to specific activities, entities, and groups of people. Those tax breaks, which totaled nearly $1.9 trillion in 2024, increase annual deficits and can create market distortions that damage economic growth and productivity.
Net Interest Costs
Trump seems to have some grasp of interest projections.
However, he has no economic grasp of where inflation might be if the Fed holds interest rates too low as it has done on numerous occasions.
Shelter costs are out of sight, and that’s with poorly constructed measures of inflation.
Special Interest Vote Buying
Rather than make the tax code simpler, Trump added no tax on tips, no tax on overtime, and dramatically sweetened the pot on state and local income tax deductions (SALT).
Those tax breaks, which totaled nearly $1.9 trillion in 2024.
Tariffs
Tariffs will raise money and Trump brags about that. But tariffs primarily hit small businesses (who will go out of business) and end consumers, especially lower income groups.
Trump now claims to want to give tax check rebates on tariffs which makes a mockery of claiming tariffs will balance the budget.
It’s a massive wealth redistribution scheme from the poor to the wealthy.
Trump is seriously illiterate on tariffs. Downstream negative repercussions will be massive.
Spending Problem
It’s often said, we have a spending problem not a revenue problem, but what did Trump do about it?
The answer is threaten any Republicans who would not go along with his One Big Beautiful Act that increased the deficits.
The MAGA cult cheered.
And Trump will increase military spending too. It’s sickening.
Mish Proposals
My proposal would eliminate income taxes on the first 30-40K of income, kill earned Income nonsense, end child tax credits, and curtail food stamps and Medicaid.
In other words, I want to encourage people to work.
One of the big problems is the way Congress allocates money. It makes it hard to close unneeded military bases or end pet projects. A block grant to the Military (and to states for Medicaid) would correct the problem.
We tell the Pentagon, you get 20 percent less, but you decide how to spend it wisely. They would have an incentive to root out waste and marginal projects.
The same applies to states with Medicaid. The current incentive is to promote fraud, not stop it. That mentality must change.
The the extent Congress refuses to cut spending, we need to raise money. A VAT that excludes food and medicine but has high rates on boats, jewelry, etc. would be far better and more efficient than Trump’s nonsensical reciprocal tariffs.
We need a simpler tax code, Trump expanded it. I propose a tax code so simple we could practically eliminate the IRS.
Corporate taxes are a mess. We encourage production overseas. I suggest we lower (or eliminate) corporate taxes on production in the US and set a higher rate on taxes overseas. Investment would flood back into the US.
Instead, pharmaceutical production moved to Ireland to take advantage of Ireland’s (and the US) tax code.
Related Posts
July 23, 2025: Trump Takes Aim at Massie Over Epstein Fiasco, Whom Do You Back?
Trump is now openly campaigning against Rep. Massie.
August 3, 2025: Trump Puts 93.5 Percent Tariff on Graphite Needed for EV Batteries
Here’s another shoot yourself in the foot tariff move by Trump.
August 11, 2025: Trump Imposes Export Taxes on NVDIA and AMD, Unwise and Unconstitutional
Illegal and unwise monetization of trade policy is underway.
Regarding pharmaceuticals and Ireland, please consider Weight Loss Drugs Help Blow Out the US Trade Deficit
Things are very broken, and Trump made them worse.
Debt to GDP ratio for last 4 years has been around 120%. It was 107% in late 2019, and above 98% since 2012.
Congressional Budget Office forecasts the FY 2025 deficit to be no more than the FY 2024 deficit.
Annual inflation has remained below 3% for at least the last 12 months.
Let’s see how this all plays out by next February, especially with the 10 Year Treasury and 30 Year mortgage rate.
Many economists and pundits say that this rate of debt accumulation is “unsustainable.” What does that mean exactly?
Throughout the first two decades of the 21st century interest expense was stable at around 1.5% of GDP. Inflation was low despite war-ravaged defense budgets. QE kept interest rates low. The 10-year bond rate was pretty stable at around 2%. Many thought Short term interest rates would stay near zero forever.
Then in 2020 the Covid pandemic hit, deficits went up, Ukraine war sanctions hit, Covid-related supply chain bottlenecks hit, and inflation was back. Interest rates went back up.
Suddenly in a matter of five years interest expense suddenly doubled to 3% of GDP and rising on a pretty vertical slope. We will soon surpass the level of the Volcker-era peak of the ’80’s, when the federal debt was one-quarter what it is today.
Does “unsustainable” mean we cross a critical threshold? Mathematically, how and when would this occur?
When the threshold is crossed, I suggest one of three scenarios (or all 3) will occur:
1) Hyperinflation.
2) Collapse
3) War
We could — maybe — avoid or significantly delay 1-3 via #4:
4) Debt monetization by the Fed — QE and ZIRP return. In this way debt service as % GDP return to normal levels due to higher debts being offset by higher GDP and near-zero interest rates.
This assumes that #4 can be sustained without significant inflation, as in the pre-covid era of this century. Maybe this is possible, e.g. as boomers die off — relieving budget pressure on SS and Medicare? If not, we’re in for a heap of trouble.
Which means sustained high deficits are a big gamble on an uncertain future.
Number two needs to be Devaluation.
We need Congress to have the guts to drastically cut spending. I would also like to see a flat tax with NO deductions. You pay tax on 100% of your income. Corporations can only deduct the salaries paid to non-board members/executives/CEO. Congress is going to have to raise the tax rate paid into social security. I think they’ll also raise the retirement age to 70. This will help with the expenses for Medicare if you have to wait to age 70 for Medicare.
Forcing people to wait until 70 to go onto Medicare isn’t going to happen anytime soon.
The taxable income limit on SS this year is $176K, which is laughably low, given that there’s no limit on Medicare.
Raise that to $500K and then we might consider it fair. Also, the bend-curves are something like 10%, 32% & 15%. Just add a 0.5% final tax that you receive no benefit from over $500K. Then, let the wealthy forego their SS for an equal tax deduction.
As for raising the FRA to 70, that’s fine, but it needs to happen over a fairly long period of time. The move from 65 to 67 is taking 22 years. I read a proposal from what I believe to be a solid source that suggests Congress is considering a birthday of 1970 or later to be 68 FRA and then 1980 or later to be 70 FRA.
If you see Mish using a National Debt amount of $37Trillion, interchangably with the Debt held by the Public, which is $30Trillion, please say so. The CBO and now Mish like to use the $30Trillion number to downplay how bad things are. He goes on to say things are bad but with the ratio of total debt to GDP being 123% ( .S. National Debt Clock : Real Time ) not 100%, things are even worse and the urgency is lost,
Silly
If the left branch/arm of the US government had $100Trillion in debt, but the right arm/branch had $300Trillion in assets (including the $100Trillion in debt owed), the US would be swimming in largesse and be able to provide every American with tons of freebies.
It’s not the debt that matters, per se. It’s what the assets minus the liabilities are, which is what the debt held by the public tells us. That is the ‘total’ we American taxpayers owe to someone else
Dear HEWO, I was going to school you about how our Double Entry Bookkeeping system works. But after reading your comments, over and over I believe you need to work on your fifth grade arithmetic first.
The Trillions missing from the SS trust fund are a debt not an asset. Just because the SS Dept says they have $2 Trillion in their “reserves” doesn’t mean the number they have written on a scrap of paper has value. All they have is a verbal promise from a dead President, to be able to pay all the benefits that were promised. The Treasury Dept has to issue (and sell) bonds to raise the cash needed. In total the boomers get their checks and the Treasury Dept has increased the Public Debt. And the assets the SS Dept never had are erased and the debt is still there, just permanently on the books of a different Dept. And the National dept goes up some more.
I know how to fix this, cut taxes even more, surely it will all trickle down! /s
Massive deficits should be inflationary and lead to money creation. Treasuries can be used as loan collateral these days. Borrow a hundred grand with a ten thousand dollar note as collateral and 90k is created. If I have this wrong please correct.
Before feeding your docs try intermittent fasting. If u suffer from “impaired gut” which can flare in cytokine attack spreading and inflaming the lungs and heart, give your gut a break. Your microbiome will rest. 18h/24h fasting might enhance nitric oxide production. ChatGPT can give u charts and what to eat thereafter.
Elected officials are incentivized to spend more and reduce revenues. The only set of policies that will reduce the deficit is to change that equation, and that would have to be done with a constitutional amendment. Anything else is a pipe dream.
What happened to the balanced budget agreement? Bush’s wars?
Silly, those are just issues to fool voters, now they are in office. See how this works?
What ever happened to the Balanced Budget Amendment?
Everyone (with a lick of sense) realized that when a recession occurred in the future followed by declining tax revenues, Congress would have to cut spending immediately and drastically (to ‘balance the budget’) which would automatically accelerate the recession into a Depression.
Doh
U cannot reduce the US gov debt on a dime. The ratio: Debt/GDP peaked during covid at 133%. It’s now 119%. A few sporadic negative Qt might enable JP to cut rates. Going against the trend of growing and empowering the federal gov to its obese size ==> is winner: lower rates, a smaller gov, tariffs… The federal gov is already on intermittent fasting, before attacking the debt cancer to reduce it or to eliminate it. The risk is too high. Only a ruthless leader can do it. We got the right one. Our previous presidents were not good enough. It will not be fun, but it must be done.
The world is drowning in debt. Welcome to WW3
Trumps term two disaster is just starting to unfold as the tariffs are not bringing in enough to offset his massive spending increases (much less bribery payments of $5,000 to MAGA voters.)
Inflation has raised its ugly head as tariffs can no longer be absorbed by corporations and are starting to be passed through. Either way margins are down and profits with them.
I personally get a kick out of watching Trump spout off about the “Trillions” that the tariffs are bringing in. Not true ~ and I have come to the conclusion that Trump simply can not tell the truth about anything. Trump is a compulsive liar.
Today Trump sits down with Putin and Putin will kick him squarely in the nuts. Poor Donald is so far out of his league.
Trump will of course spin it as a win of some sort for America.
>
Kamala, please come back !
Thanks for reminding us things can always get worse.
Denninger had a good post yesterday.
https://market-ticker.org/akcs-www?post=253805
So much for rate cuts.
We can thank Donald Trump for failing miserably to control spending. Interest rates could have been cut and taxes simplified and increased appropriately, but here we are going down the same path.
Oh wait, this path is worse…
Meanwhile China flips Trump the bird and Putin dangles waterfront property under trumps nose as bait…
Elections have consequences!
Baruch Spinoza: freedom of religion, freedom of speech, freedom of idiotic thoughts.
James Madison liked Spinoza.
Not that I’m disputing that Trump promised to moon, but look at the howling over DOGE’s mild trimming. There is no appetite for cutting spending. Any Congress can do it at any time, but they don’t.
The country is addicted to Free Public Money. If Congress cuts it off the cities will burn and the countryside will freeze in the winter.
Social Security is 90% funded from current revenues so despite mpv045’s whining that’s not the problem. Medicare is 13% funded from its taxes and Medicaid isn’t funded at all. Those two are the problem children along with the MIC.
“Social Security is 90% funded from current revenues so despite mpv045’s whining”
It’s 90% funded based on current projections which can change on a dime with idiot policy. But assume it’s 90%, are your prepared for a 10% cut? Maybe you’re not a welfare queen like most but the average 401k for seniors is $200k which is nowhere enough to live on especially if inflation explodes.
Oh and since I bring up inflation, how much do you think your $1700 SS payment will buy in 5 or 10 years?
Inflation and cuts to SS will have you howling to the moon in 5 years. You’ll howl so loud I can hear it now in the present.
You can never add a new tax until you get spending down or they will just keep spending. No VAT on the table until spending gets below 18% of GDP.
Intra-governmental debt matters, so I don’t understand the CHOICE to exclude it from debt to GDP graphs. All you’re doing is making things seem less dire than what they actually are.
Again, as it matures, intragovernmental debt is ALWAYS refinanced to PUBLIC debt. Granted, this type of IOU tends to be longer-dated maturities, but it still counts. And it’s rising just like public debt is although not quite a fast.
It’s an unfunded liability, so please report on the full problem. $1T every 5 months sure as hell should get people’s attention, but unfortunately, it doesn’t. And that’s a major problem.
It’s not going to be too much longer before the treasury / fed embark on a major financial repression regime just like what happened after WW@ through the 70’s.
=Intra-governmental debt
yes, it is correct!
Intra-governmental debt is surplus of SS funds. so far SS funds has been in surplus. so each year USA fed gov take that $$$ surplus, mark it as current revenue and spend it!
instead of real money of SS funds it issues special gov bonds (=just paper w/ number on it ) , and accounts those under Intra-governmental debt !
it is in black and white letters under off/on monthly /yearly fed gov budget reporting.
nobody even hides this.
alx
And Trump wants to primary the most prominent fiscal conservative in Congress. It’s almost as if he’s being directed by a foreign government to destroy the American economy and our European Christian heritage egregore.
Israel
The trillion dollar Trump coin will save the day. Well, 37 of them…
And the rhodium one will fund the Trump colony on Mars.
Cmte de Vergennes liked Baruch Spinoza so much – freedom of religion, freedom of thought and freedom of speech – he sent admiral Cmte DeGrasse and general Cmte Rochambeau to help GW. In the 1791 Constitution & Bill of rights Baruch Spinoza was enshrined. In 1673 Spinoza was offered a job in Heidelberg U, but he declined, He feared that his view of freedom and liberty will cause troubles. His wealthy family and Amsterdam Jewish community excommunicated him. He made living as a lens polisher for telescopes and microscopes. He died at age 44 from lungs inflammation.
Albert Einstein loved Spinoza.
AI troll?
Miguel, sometimes I am absolutely struck by brilliant simplicity. I eagerly await your next post.
Long Real Estate. Should do well.
Probably not, not even desert I guess that will be for AI’s.
Simple rule. Look who hurts now. who is homeless and who is becoming homeless.
If you can find Bunny, I think that was her name, the Vanlife woman on Youtube listen to her comments regarding living on private property.
Next squeeze and it has started is those who took the hit by not paying college loans. After that Medicaid and Section 8.
At present you see the money managers and low end Hedge fund guys complaining because the water has stopped flowing in their direction.
I don’t really know how to divide wealth because it will vary city by city and state by state, below the Nuevo Riche and Bitcoin bros with no assets.
The pain will creep up the social ladder really fast. Head swimmingly fast.
Your gated communities will start losing people who then live in their cars or maybe move in with other family members in cheaper states like Alabama.
Then the Faux Neuvo Riche, Bitcoin bros and tech guys. Like Claude can compete with free Deep seek or Qwen.
After that some real asset billionaires will bite the dust.
This the crack moved into white suburbia and wiggers started hanging drawers out the back of their pants social equivalent.
Learn to code failed. Freegans and homeless know how to scrounge already.
I guess find a pimp or learn to whore.
With any luck basic income will kick in before too many people start skipping every meal a day.
The problem is the US never looked at third world countries and how poor folks lived because we lived with the illusion of wealth.
Keep this in mind as an example, Sammy Davis Jr.s family had to dig him up and remove the jewelry he was buried with to pay off debts.
My old property deed has one of the owners pass down momma’s silver ladle. A single silver ladle was a wondrous piece of wealth nearly 100 years ago.
We ain’t come that far.
And the drop will be fast and viscous.
I was just watching Hell on wheels and Brigham Young gives a little speech about being so poor he ate wild Sparrow.
Living in cities it will be rat, cat ( and some Aborigines and homeless already eat them) and half rotten leftovers.
The good old days are over and never coming back.
Debt and loss sits about three quarters up a ten foot ladder and people are tossing each other off to maintain a slim handhold.
Good luck and learn to FORAGE.
My model for this is, where are you on the balance sheet, in the capital structure’s waterfall (as in a corporate bankruptcy)? As in, who takes the first “losses” (cuts)? Who are the “equity” holders who will be wiped out, who are the “senior creditors”? I think the Big Beautiful Bill was a swipe at this, reclassifying many personal/family welfare-staters (and certain formerly subsidized businesses and other institutions) lower in this order. But the problem is, while they could throw many in the base under the bus, yet in classic GOP form, they could not bring themselves to tax in any realistic proportion to how the numbers pencil out. It comes back to the whole electorate wanting stuff for free. I wonder in what form the next shoe will drop.
I hope you understood what you wrote there? Maybe you can explain it to us?
Sure TACO needs to create a WORKS program for all the new poor. Maybe they can repair roads and rails and live in tents. community tents.
save a bit of wage for the working girls like the old days.
Now you wanna take away jobs from AI?
Hey
I am alive!
They did the semi-invasive procedure today that I thought was last time.
My heart is OK and the stents did not move.
Great! I had a stretch with things that remind me of this. I’m pleasantly amazed you set an example of staying busy!
keep hiking !
That is possibly the worst thing you can tell someone with heart issues.
Add that the shrinking Magnetosphere is allowing more Cancer causing radiation to hit the Earth and at a higher elevation it is even worse than a valley, avoid the sun.
Learn some REAL Taichi or Qigong. Nice slow stuff that allows everything to move, lubricate, and increase blood flow.
Better than Yoga.
Taichi is known to build bone in the elderly because it is based on proper alignment, unlike hiking.
Bagua is another internal art that works in the same way but is circular.
Hey, I am alive!
They did the semi-invasive procedure today that I thought was going to happen last week,
My heart is OK and the stents did not move.
No Hiking!
Doctor was emphatic.
I asked for 1/2 mile walks and got an OK.
I hope to now experience health benefits by vicariously enjoying your 1/2 mile walks.
Should you do any additional exercise please inform me so I can promptly inform my body. (As well as start purchasing smaller size clothes.)
Excellent news, lay off the bacon and eat the raisin.
Great news!
good! be well.!
Trump works for the antisemite zionists who hate America and the rest of the human race. He’s doing everything to destroy America’s standing in the world. That other countries – including China and Russia to a considerable extent – are bending the knee instead of cutting ties, in itself is proof that most of the governments of the world are similarly under zionist occupation.
Otherwise, why would they make the livelihood of their people contingent upon selling something to the US in return for intrinsically worthless (and ILLEGAL according to Article 1, Section 10 of the US CONSTITUTION!) digital paper fiat Federal Reserve Notes (falsely known as dollars)? Against their national interest? Knowing payment in FRNs is illegitimate and the US debt can never be repaid anyway?
Remember.
Even Mao was a Yale man.
“antisemite zionists’, isn’t that a contradiction?
Zionists call everyone who points out they are Zionists ” Antisemites”.
And to be a true “Antisemite” one needs to historically define what cultures were truly Semites.
a member of any of the peoples who speak or spoke a Semitic language, including in particular the Jews and Arabs.
To the best of my knowledge, DNA tests are illegal in Israel because they basically reveal that most Israelis are not semites but Eastern Europeans, Turks, Khazars, etc. Arabs, Palestinians and Jewish descendants of the long-disappeared Hebrews of the Bible who were living in Palestine before the 1920s, those guys are Semites. Chinese also speak English. So, despite your false claim, language does not establish race nor nationality.
Of course. Most Israeli citizens originated in Turkey by way of Europe. Hence the signs-“go back to Europe”. They’re a colonial power not descendants of the ancient Hebrews of the bible.
i read it was every 100 days. forget which article i read it in but some serious economist or analyst maybe on ZH
Yes, 100 days
What a lovely and beautiful Peterson chart. That blue makes me think of the ocean and a ship named the Titanic. Think of that growing blue as an ocean of interest flooding the holds of the Titanic. It’s only a matter of time.
The Trump cruise has five ports of call: Debauchery, Debt, Despair, Dolor and Depression.
Got life boat?
to fantasy island.
I lost mine in a boating accident
Life expectancy for males is 76. For females: 81. Most boomers were born between 1957 and 61. In mid 2030’s most boomers will reach age 78. Their death rate will peak between 2035 and 2039 ==> 78 + 1957 = 2035 // 78 + 1961 = 2039. Most will liquidate their assets 5 years before expiration date. Demand for highly skilled workers will rise due to onshoring and boomer’s “death bubble”. Stocks bubble, RE bubble, Death bubble and ==> TAX collection BUBBLE. Insurance actuaries, pension managers and the US treasuries are thinking about it. It’s so simple. Mish, get well !!
No wonder there’s so many M>F transitions. You get five more years.
Collection of taxes in illegal and unlawful (according to the US Constitution) intrinsically worthless digits on a computer screen, (falsely) known as dollars (but more accurately described as Federal Reserve Notes which are not even Notes) is collecting NOTHING.
Soon coming to a blue planet near you.
According to the CDC, the average male dies at 72.4 years old. That’s different than life expectancy (at birth). Old age is not as common as many think. I’m 80 and most of my male friends passed in their early or mid 70’s, so I trust the CDC.
That works out to just over $600 per month for every single person in this country. Probably something like $2000/month for anyone with a job. A bit under $80/day. Ugh.
37 trillion equates to $112K for each person in this country, again, probably triple that when you take out people on social security/medicaid, or never making enough money to pay income taxes. Each taxpayer writing a check for $330K to pay off the debt is an impossibility. Either the whole system crashes, or the debt is inflated away, which are probably two words for the same thing.
Why do they use “debt held by the public”, excluding that held by SS, etc.? Why understate reality?
Debt held by the public is the correct measure.
The rest is intergovernmental nonsense,
Seriously? It’s not nonsense! It’s ~$7.4 trillion, mostly in the Social Security and Medicare trust funds. The US taxpayer is as obligated by that as any other Treasury bill or bond.
You call it nonsense. Gross debt is what they use for the debt ceiling because it is debt we taxpayers owe.
Intra-governmental debt is surplus of SS funds. so far SS funds has been in surplus. so each year USA fed gov take that $$$ surplus, mark it as current revenue and spend it!
instead of real money of SS funds it issues special gov bonds (=just paper w/ number on it ) , and accounts those under Intra-governmental debt !
it is in black and white letters under off/on monthly /yearly fed gov budget reporting.
nobody even hides this.
“Intra-governmental debt is surplus of SS funds”. What you are calling a surplus is federal govt debt. Money SS has lent to the Federal govt that is now an obligation of the US taxpayer. A bookkeeping surplus for SS is nothing but IOUs–adding to the Federal debt. To ignore it makes no sense.
But SS is not a ‘callable’ debt. It’s a future obligation. In other words people who are say 50 are expected to collect X amount of future SS money based on their earning credits * life expectancy when they collect. But they may not live that long and more importantly, they can’t ‘call’ the debt today and get the money.
In other words you as a tax payer today are not on the hook for that 50 year old.
“But SS is not a ‘callable’ debt.” The Trust Fund has shrunk from $2.9 trillion in 2020 to $2.5 trillion in 2025. That $400 billion had to be called [to make SS payments] or matured. Effectively in the situation we are in, it was transferred to the “Debt held by Public” category. As all of it will be in time.
Since they’re only talking public debt, social security and old people and medical costs are not a problem since they are funded with special non-marketable bonds.
Expressed as it should be, not a ratio to GDP, but to tax income, America has the highest ratios in the civilized world, much higher than in Europe or Greece. You don’t service debts from turn over but from earnings.
False. You are disseminating disinformation.
The “special non-marketable bonds” are put in place of the cash and US Treasuries and Bonds that the government steals from the Social Security account. The purpose is to attempt to cover up this theft which amounts to high treason.
“…highest ratios in the civilized world”
Again, you are being extremely disingenuous: highest ratios of WHAT?
You must work for the Fed.
You work for the Fed
The Good News is this means the debt ceiling will be hit sooner and create an opportunity for spending cuts.
OK, that was a lame joke and I apologize.
We’re starving the beast!
This year’s debt ceiling is next year’s debt floor!
If one believes the authenticity of mafia public bookkeeping, then those are the numbers.
If one disbelieves, then those are the minimums.
Voting for Demopublicans has consequences.
Pull out the free stuff rug and hello, consequences, on every sidewalk. Only those with orbital space yachts need not worry? Paraphrasing Lenin: Every society is three meals from chaos. Humans want their free stuff, and will take hostages at any necessary scale to get it. I don’t know anyone who is suddenly going to embrace full saintly rectitude.
Trying to run the world is expensive.
Agree!
Fortunately for our lords and ladies, they skim their “management fee” off the revenue regardless of profit. We see that most easily every time a failing company pays millions to its executives.
Within a few quarters the federal gov will start intermittent fasting, step by step, nothing radical, before shocking the debt cancer. While trimming its obese size the private sector will takeover. Trillions are pouring in to finance onshore mfg, protected by tariffs. The dollar will not be devalued as in the 60’s and 70’s after the Suez canal closure, Vietnam and Yom Kippur war. Trump assassins failed. He was not sacked by crooked politicians and Andrew Jackson will never bonk.
A lot of solid information in this post, but bullet point, “4) Insufficient Revenues: ….” makes sense only if you don’t look too close. Further up in the article, the CBO indicates federal spending is 23.3% of GDP, yet over the last near century, federal revenues have never exceeded 20% of GDP, no matter the rates or what is or is not taxed:
Federal Receipts as Percent of Gross Domestic Product (FYFRGDA188S) | FRED | St. Louis Fed
Summary from the above is that there is no question we have now past the point where the federal government can tax its way to a balanced budget.
Further, the government basically consumes all resources it receives, it does not, for all practical purposes, generate wealth. However, it is wealth from investment in profit generating ventures that provides resources for consumption. Our government cannot survive by strangling the private sector that supports it. Trying to tax the private sector to 23.3% of GDP will assure federal bankruptcy; as someone once said, slowly at first then all of a sudden. We are rapidly moving toward ‘all of a sudden’.
The ratio: gov Debt/ GDP peaked during covid at 133%. In Q2 2025 it’s 119%.
It will cont to decay before falling dramatically.
Welcome to Weimar Germany everyone!
AI thinking: do the math: Weimar, or beyond peak during covid at 133%.
Hey, that worked out just fine. Sieg Heil!
A painter with a vision.
The Federal Debt Binge has inflated an everything bubble. It will blow up, but when?
The party currently in power is trying to kick the can past the 2026 midterm elections, to gain (or avoid losing) some of that power.
The other major party is not in power at the moment, and has no nationally viable leadership able to offer a credible alternative. In part because they were clearly kicking the can themselves, past the 2024 election.
The Establishment which owns Congress (track what Congress actually does, not their blather) is unable to stop spending Federal money on itself … money that doesn’t exist, must be borrowed or printed into existence, and now drives toxic inflation.
The Federal Reserve, despite its flaws, is quite possibly the only institution holding things together. It is under political assault by the current can-kicking party.
Lowering short term interest rates will solve nothing and might well make everything worse. But it would help with the “kick the can past 2026” goal.
There aren’t any historical scenarios I’m aware of where this kind of situation ends well.
It is actually the monetizing of the debt by the Fed (amplified by the banks in its fascist banking system) that inflates the bubbles. In the absence of “money-printing” euphemized as “accommodation”, interest rates would surge high and slap Congress in its corrupt face. People would then know who to blame.
Money printing is the big lies that enables our bloated, greedy govt, like a misguided friend enabling an alcoholic.
The Fed can start a boom with an expansion of credit, but in the end all bubbles inflate even after the Fed tightens … which it has been doing for 3 years now. (check their balance sheet, or just read WolfStreet).
So here we are in the absence of printing or accommodation and the bubble refuses to die.
That’s because the bubble is almost-everyone’s fault, not just the Fed’s. It’s a mass-formation psychosis, people believing in things that cannot possibly be true. Alas, most people, when seeing prices increase, become greedy and willing to buy “whatever number is going up”, and pay ever-more long past reasonable value. Stocks on average aren’t worth what people are paying today, and neither are bonds or houses.
Since most everyone bought into the mania, and is now pretty well screwed by this, people are all collectively closing their eyes and hoping the problem goes away somehow. But it won’t.
It has been this way forever, and the last 300 years of it are well documented in books like “Manias, Panics and Crashes” or “Devil Take the Hindmost”.
The only question now is who loses, how much and in what order. Inflation or deflation doesn’t matter everyone will lose, but depending how it goes some will lose a lot more.
May your stocks, houses and cryptos at least outperform the tulips of yore.
“So here we are in the absence of printing or accommodation and the bubble refuses to die.”
The 2020-21 money creation ex nihilo was uniquely extreme. So much so that its cessation of growth [called tightening] still leaves us with relatively loose money. 2% real interest rate for a 10 yr Tres. is not tight money. Heck, even the monetary base is up 3% since the election, and M2 is up 4.5% y-o-y.
Things got pretty shaky in the late 70’s as the New Deal momentum finally slogged into the mire. (Oh yeah, that’s when Pete Peterson began sounding the alarm on our national debt!) Things got very dicey in 2008 and 2020, and we found a way. This might, or might not, be more intractable than any of those.
Does it even matter if the debt is unsustainable? I mean, what are the lenders to the USA going to do? Sell the debt to ACME Debt Collectors?
The same people and corporations which have benefited from these policies are waiting to buy up blm land etc at bargain prices.
You make a good point JCH, but the obvious answer is the unsustainable debt does matter. Currently the entire national debt has about a 3+ year maturity on average and the treasury issues about a quarter trillion new debt weekly, mostly covering matured debt. What are lenders to do, just not roll over to new treasuries, collect the face value. It will only take a week or two for the treasury and Fed to get religion and even Taco might understand fixing a debt problem with more debt is not sound thinking. Raising the debt ceiling $5 trillion was like giving an alcoholic more liquor to fix his drinking problem.
In the long run, we are all dead. — J. M. Keynes
It’s actually the only solution: to continue doing what we have been doing. It is exactly what we should be doing. It can’t be fixed. Cutting spending will do nothing but cause even worse damage because the people who think it’s like family finances on the kitchen table simply don’t get it. It’s not like family finances on the kitchen table. Not even remotely like that. The correct answer is to ride this wave until the end, whenever that might be. When it ends, it will end with a whimper. Because there is no other choice or other way. Who knows, maybe the entities to whom the national debt is owed might wise up and step forward and forgive bunches of it to save themselves. They’re never going to get a lot of it back, and that’s their fault. They bought the bonds with money of which they had no need and for which they could think of no other use.
It’s only a matter of some time before the Fed (assuming it continues to exist) will pull the plug on government deficit spending.
They’ll have to choose that over hyperinflating (destroying) the dollar.
Q3 GDP might rise to $32T/$33T. The healthcare sector is laying off workers. Docs, who were too nice to their patients, who failed to produce enough $300K invoices, are tossed out. The federal gov: FDA, CDC, NIH and HHS are cutting 30,000 full time job workers through layoffs and attrition. Mfg absorbed tariffs. They don’t want to share with their wholesale customers their cost structure. With their retail customers they can afford to absorb tariffs bc their profit margin is high and their customers trimming spending, resisting higher prices.
Don’t worry as taco said the tariffs will bring down the growth of the unsavory debt level.
Not a quadrillion, though.
Mish-
I dont think you really believe that achieving debt reduction can occur with less than 60 votes in Senate. The Mantra for DEMS is tax and spend and they will fight, sue, delay, etc to prevent cuts. Cuts which they define as a reduction in the increase rate??
I don’t see the Republicans fighting to defund the military industrial complex or stop funding the holocaust in Gaza. They’ve handed the credit card to Netanyahu.
Borrowing money to give to the wealthiest people in the world… hmm… wonder who’s in control of the government for it to do such a thing?
Giving “tax rebates” [an oxymoron – if there’s money to redistibute than why have a tax?] merely makes his tariffs REGRESSIVE TAXES ON STEROIDS. Turbo charging regressiveness into the system. How is that a net benefit to society AT ALL?
B/e taking a highly regressive tariff (defacto tax collection) then giving it out WITHOUT mens testing is defacto just screwing the poor more. Anti-means tested on the way in and then no means testing going back out. WTH – If it’s circular then don’t have it! No doubt about it.
Some stupid countries committed to invest in the US. Based on Miran’s November 2024 paper we may expect that these countries will be forced to buy 30Y or even 50Y T-bonds yielding 0.50%p.a. (90% for us and 10% for them as per Trump). That will give Trump 3 years (some new Treasury debt will be sold to US investors) to play some tricks and “buy” 2028 elections. Apres moi deluge.
Compounding is a wonderful thing.
There will come a time (unpredictable) when it will be impossible for the government (federal) to collect enough in taxes to pay all of its expenses, including interest on the national debt. The Gov’t can of course borrow an indefinite amount through the Fed. (concealed green backing) given a few changes in existing law. But that would lead to hyper inflation – i.e., a collapse in the credit of the Gov’t.
So the easy way, is the way the French did it in 1960. Simply say that beginning Jan 1 (or any other date), new dollars will be issued, and that each new dollar is worth 100 old dollars. Then follow that up with a largely state controlled economy.
In 1960, the French economist / mathematician Jacques Rueff, during Charles de Gaulle’s presidency, converted the old franc, to a nouveau franc, equal to 100 of the old franc. However, even with this substitution, inflation continued to erode the currency’s value, though at lower rates of change, in comparison to other countries. And this new franc equaled 20 cents to a U.S. dollar. The old rate was 5.00 to a dollar.
In 1960, the French franc, which was one of the weakest currencies, overnight, became one of the strongest. Correcting policies included plans to 1) balance the budget, 2) stabilize the currency, and 3) eliminate currency controls.
The gold content of the franc increased 100%, & 1) foreign exchange rates, and 2) France’s internal prices, reflected the conversion overnight. Internally, prices dropped about 90 per cent, and the foreign exchange value rose from about 0.238 cents per franc, to about 20.389 cents per franc.
Domestically, France was on a managed paper standard; externally, on a modified gold bullion standard. With the new policies, France’s economy strengthened, and the franc became fully convertible @ approximately its gold par, into gold for foreign exchange and into foreign currencies.
With the introduction of the Euro, the franc in Jan. 1, 1999, was worth less than 1/8 of its Jan. 1, 1960 value.
After default, it might be beneficial to transfer many of the Federal powers back to state-controlled powers.
When an AI runs everything and robots do all work, everything will be free, money will be meaningless and all of us will have unlimited time to ponder the whichness of the why.
This is no more than a generation in the future.
I have a feeling that the road to there will be a doozy.
The deficit is unsustainable. It means a substantial proportion of it will be monetized by the FED. Need to free up frozen savings in the banks (i.e., drive the banks out of the savings business which doesn’t reduce the size of the banking system). Need to eliminate the payment of interest on reserve balances.
Monetary policy should delimit all required reserves to balances in their District Reserve bank (IBDDs, like the ECB), and have uniform reserve ratios, for all deposits, in all banks, irrespective of size (something Nobel Laureate Dr. Milton Friedman advocated, December 16, 1959).
Link: Fiscal Dominance and the Return of Zero-Interest Bank Reserve Requirements (stlouisfed.org)
“If something cannot go on forever, it will stop.”
— Herb Stein, Senior Fellow at the American Enterprise Institute
Humans blunder into catastrophes all the time, but we breed back up to overfill in no time.
(– My paraphrase of Malthus’s essay on population)
It’s already monetized. The treasury securities can be used as collateral for new loans, thereby creating money. Deficits will be increasingly inflationary no matter what the fed does.
“I don’t think the heavy stuff is gonna come down for quite a while”
–Carl Spackler, Caddyshack–
seconds later, lightning strike on the Bishop
To be fair, the Bishop invited being smote down when he blamed God for him missing the putt.
The lesson there is take responsibility for your actions.