Issue 016 · August 25th 2026
Allow me to re-introduce [the concept of a debt spiral] - Jay Z
- ISSUE PRIMER -
The national debt crossed $40 trillion on August 18, months earlier than forecasters expected. It was $5.8 trillion in 2001 and $20 trillion in 2017, so it has doubled in under nine years. Interest alone now runs about $1.2 trillion a year, more than defense, and the 2025 tax law adds another $4 trillion-plus over the decade.
So is this a crisis, a distraction, or just inevitable? After all, this has been a trend since the second Bush president → Bush, Obama, Trump, Biden, and Trump again. Everyone grew it. In fact, the debt grew under Reagan too, and HW Bush lost his re-election bid by reducing the debt and reneging on his “No New Taxes” promise.
Every one of these Presidents says it mattered. Every one left it higher. And anyone who tries to fix it (higher taxes or lower benefits) is going to get themselves into political hot water - maybe political lava. So… DOES the debt matter? Let’s get into it.
→ Yes, interest payments > defense spending.
Why does this matter? A few reasons: conceptually, it’s kind of gross - we spend more paying off bondholders than defense or Medicare at this point. Also, the more debt the US takes on - the more YOU have to pay on your mortgage or credit card rate - to get more money to fund programs, the US has to issue more bonds with a higher return. Since the US debt is considered “riskless” (we can print our own money and every coutry relies on us) - every other funding mechanism is more risky, and so definitionally has to generate more return (aka interest). Then there’s the two potential end states. 1- we just reach a point where we are literally paying for NOTHING but interest and the big 3 (healthcare, social security, defense). 2- debt spiral, eventually investors decide putting more money into US bonds ain’t worth it - the US printing money causes inflation to be greater than the interest payments (say you buy $5 bond, and a $2 promised return, but with inflation, that future $7 is worth less than $5 today). It’s complicated, but it’s NOT good!!!
← No, we’re the world’s currency, dude.
Why doesn't this matter? A few reasons - again, we borrow in a currency we print ourselves, so we can't be forced to default. Our debt is about 123% of GDP - meaning we owe roughly 1.2 years of everything the whole country produces. That sounds huge until you look at Japan, which has run near 240% of GDP for decades, twice our level, with no spiral and no collapse (though admittedly - most of their investors are domestic - less likely to walk). Third, debt is used to build things - infrastructure, research, keeping people working in a downturn - that can theoretically grow the economy faster than the debt grows. If America can get its sh*t together and stop with the self-loathing, we could get back to doing exactly that. After all, the US shrank its WWII debt from 106% of GDP to 30% - didn’t write a check for it, just grew the economy. The crisis is a lot further off, and a lot more in our control, than the doom crowd likes to spout (and they’ve been saying we’re doomed for 20 years lol).
- NYC Event to Learn More -
The National Deck Clock
When: Every day, whenever you want
What: Listen, I couldn’t find a great event about our national debt crisis coming up this year. I’m shocked. But if you want to see a ticker of how much your portion of the national debt is in a random part of Midtown, just stop through 43rd between 6th and Broadway. Or you could just click the link above lol.
- Curated Articles -
America’s New Debt Reality (Jennifer Babchuk, Alex Hubbard, Henry Rawlings, Charle Schwab) - Brief (but dense) write up of how our national debt growth is reducing capacity we have to face future crises.
The Deficit Myth (Milken Institute) - Wry, clever Modern Monetary Theory (MMT) on why the deficit is good, baby.
The Room at UNMUTED - THIS Wednesday
Few companies outside of the AI boom are doing as well as Kalshi right now. It’s hard to overstate how addicting an online platform that lets you bet (ahem, make futures contracts) on everything could be (or how obvious it that it would be this popular). But putting aside your personal take on the betting industrial complex writ large, should we really be able to bet on EVERYTHING? Elections? Wars? Assasinations?
Turns out you can find out the answer next Wednesday when Stevens political science professor and author of “How to Raise a Citizen” Lindsey Cormack goes up against ex-Citadel market maker and author of his own destiny Yehuda Maes in a battle of wits and will. NYC comedian legend Phil Hunt will serve a fast five at the top, and first time UNMUTED moderator Gillian Goodman presides.
If you have opinions, and more importantly, are curious why you could be wrong, join us! BUT if you can’t make it, subscribe here to stay updated on all of our upcoming events.
BET ON EVERYTHING.
Worth leaving the house for NEXT week in
NYC
Wed 9/2, 7:00 PM
Doctors without Boundaries
Aaron Bola (host, ER Doctor) +
Sandeep Sen (comic) +
Caroline Montesqieu (comic) +
Jules Ballufi (comic) +
David Jin (comic)
Humor (allegedly, I don’t know I can’t prove it will be funny). History of a specific illness, plus treatments and stigmas in the medical community.
Produced by Caveat
Hosted at Caveat
Wed, 9/2 6 PM
The Curious Lives of Vegetables
Ali Francis (author)
Michael Ray Robinov (Farm to People)
For my MAHA people. And my woke food people. The history of some food and a live podcast show. Drink ticket included~~
Produced by Know Your Food
Hosted at Farm to People
Tues, 9/8, 6 PM
The Final Solution to the Jewish Question
Coleman Hughes (Free Press) +
Dara Horn (author)
October 7. Pro-Israel. Anti-semitism. Like many of these talks, not sure if this actionable, or another way for people who largely agree with each other to keep agreeing.
Produced by 92NY
Hosted at 92NY
That’s all for now. See you Space Cowboy…