Dear Friends,

The national debt is enormous. But what matters even more is the direction we're heading. The U.S. is currently running trillion-dollar annual deficits. Now, a new Republican budget plan—rushed forward with breathtakingly unrealistic assumptions—is poised to make it worse. That plan assumes uninterrupted economic growth for the next decade, with no recessions, no slowdowns, and no global shocks. That kind of assumption isn't just implausible—it’s fantasy. Even if by some miracle that turned out to be true—and when was the last time nothing bad happened for 10 years—it would still increase the debt by another $3.5 trillion.

Meanwhile, interest rates went from under 2% to over 4% in just a few years. Why? Because the Federal Reserve, in response to post-pandemic inflation, raised rates sharply to cool off the economy. That strategy works—eventually—but it also raises the cost of borrowing across the board. Including for the government.

That shift alone means we're now spending more on interest payments than almost anything else in the federal budget—more than defense, more than healthcare. Only Social Security is larger.

This has two consequences:

1. Crowding out future investment – If so much of the budget is consumed by interest, there’s no room left to invest in growth, resilience, or opportunity.

2. Loss of market confidence – Investors are beginning to doubt whether we can or will pay our bills. That uncertainty raises what’s known as the "risk premium"—meaning we have to pay even more to borrow the same amount of money.

In normal times, global turmoil sends investors rushing to the safety of U.S. Treasury bonds. But not this time. Now, even when the world gets shaky, investors are pulling away from the U.S.

That’s why this moment is so dangerous. We are testing the U.S. economy to destruction. We're finding out in real time whether global markets are still willing to buy $10.5 trillion of U.S. debt this year. If they're not, the alternatives are both catastrophic:

• The Fed could step in and print trillions of dollars to buy the debt, triggering massive inflation.

• Or the bond market could collapse, leading to a financial crisis far worse than 2008—15% to 20% unemployment for a decade or more.

The Republican strategy isn’t just irresponsible. It’s incoherent. They're cutting taxes while running record deficits, betting on magical economic growth and refusing to acknowledge that their choices have consequences. Even so-called budget hawks won’t consider raising revenue—they demand cuts, but not shared sacrifice.

If you’re feeling the sting of high interest rates on your mortgage, your credit card, or your business loans—that’s not just bad luck. That’s the cost of dysfunction.

This isn't just about fiscal policy. It’s about whether the U.S. remains a reliable steward of the global economy. If we lose that credibility, we don't just lose low borrowing costs. We lose the foundation of American economic power.

We are hurtling toward a moment that could redefine what it means to live and work in the United States. And the worst part? Most Americans have no idea it's happening.

I’m curious what you think. How do we hold leaders accountable when the cost of their decisions won’t be felt until after they’ve left office?

— Gautam

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