{"id":16288,"date":"2026-05-06T08:06:32","date_gmt":"2026-05-06T12:06:32","guid":{"rendered":"https:\/\/intramuralist.com\/?p=16288"},"modified":"2026-05-06T08:06:32","modified_gmt":"2026-05-06T12:06:32","slug":"anatomy-of-a-debt-crisis","status":"publish","type":"post","link":"https:\/\/intramuralist.com\/?p=16288","title":{"rendered":"anatomy of a debt crisis"},"content":{"rendered":"\n<p>A message from the bipartisan No Labels, as sent in an email this past week from Ryan Clancy, the Chief Strategist. This is good. Also concerning\u2026<\/p>\n\n\n\n<p><em>This week,&nbsp;Fortune ran a feature&nbsp;on the No Labels booklet&nbsp;Nightmare on Main Street, our oral history of an American debt crisis told from the vantage point of 2029. The piece compared it to the viral AI doomsday essay that briefly tanked software stocks earlier this year&nbsp;and&nbsp;zeroed in on a line that captures why we wrote it: Washington is not going to solve this debt problem until it is forced to.&nbsp;<\/em><\/p>\n\n\n\n<p><em>We wrote&nbsp;Nightmare on Main Street&nbsp;as a wakeup call. On&nbsp;our current course, something like the scenario it describes is going to happen. The country is sleepwalking toward it.&nbsp;<\/em><\/p>\n\n\n\n<p><em>Consider&nbsp;the reporting in&nbsp;the past two weeks alone:&nbsp;<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The gross national debt\u00a0crossed\u00a0$39 trillion, and Washington added the last trillion dollars in less than five months.\u00a0\u00a0<\/em><\/li>\n\n\n\n<li><em>Just this week the publicly held\u00a0portion\u00a0of the debt\u00a0surpassed\u00a0100 percent of our nation\u2019s GDP, the first time that has happened since 1946.\u00a0<\/em><\/li>\n\n\n\n<li><em>Net interest payments\u00a0are now expected to\u00a0hit\u00a0$1 trillion\u00a0this fiscal year, which is more than the entire defense budget.\u00a0\u00a0<\/em><\/li>\n\n\n\n<li><em>The Congressional Budget Office now projects the federal deficit will balloon from\u00a0$1.9 trillion\u00a0in 2026 to\u00a0$3.1 trillion\u00a0by 2036.\u00a0<\/em><\/li>\n<\/ul>\n\n\n\n<p><em>The most respected voices in finance see what is coming. Jamie Dimon, the longtime CEO of JPMorgan Chase,&nbsp;told an investment conference in Oslo this week&nbsp;that on the current trajectory there will be some kind of bond crisis, and then policymakers will have to deal with it. Hank Paulson, who served as Treasury Secretary during the 2008 financial crisis,&nbsp;warned this month&nbsp;that confidence in U.S. Treasury securities is starting to break down and that demand could eventually collapse. Federal Reserve Chair Jerome Powell has called the trajectory unsustainable and said it will not end well.&nbsp;<\/em><\/p>\n\n\n\n<p><em>These&nbsp;are the people who&nbsp;have firsthand experience with&nbsp;the plumbing of the global financial system, so when they sound the same alarm at the same time, it is worth&nbsp;listening.&nbsp;<\/em><\/p>\n\n\n\n<p><em>The chart below&nbsp;shows six warning signs&nbsp;that&nbsp;typically precede a sovereign debt crisis. Not one of them currently reads as stable for the United States.&nbsp;<\/em><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/intramuralist.com\/wp-content\/uploads\/2026\/05\/050126_smart_chart_2a.jpg.webp\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"682\" src=\"https:\/\/intramuralist.com\/wp-content\/uploads\/2026\/05\/050126_smart_chart_2a.jpg-1024x682.webp\" alt=\"\" class=\"wp-image-16289\" srcset=\"https:\/\/intramuralist.com\/wp-content\/uploads\/2026\/05\/050126_smart_chart_2a.jpg-1024x682.webp 1024w, https:\/\/intramuralist.com\/wp-content\/uploads\/2026\/05\/050126_smart_chart_2a.jpg-300x200.webp 300w, https:\/\/intramuralist.com\/wp-content\/uploads\/2026\/05\/050126_smart_chart_2a.jpg-768x512.webp 768w, https:\/\/intramuralist.com\/wp-content\/uploads\/2026\/05\/050126_smart_chart_2a.jpg.webp 1160w\" sizes=\"auto, (max-width: 767px) 89vw, (max-width: 1000px) 54vw, (max-width: 1071px) 543px, 580px\" \/><\/a><\/figure>\n\n\n\n<p><em>The reason No Labels keeps returning to this issue is that a debt crisis affects every aspect of our politics and public lives, not just our economy. The Great Depression sent millions of Americans into the arms of demagogues at both extremes. The Communist Party of the USA was filling Madison Square Garden in the 1930s, and fascist movements began to take over Europe. When ordinary life breaks down, people become more willing to back whoever promises to burn the system down. And in every case, the result is worse than what came before.<\/em><\/p>\n\n\n\n<p><em>Right now, the debt is an issue most Americans do not think about, but that can change overnight. In early 2020, COVID went from a story most people skimmed past to the central fact of every life in a matter of weeks. A failed Treasury auction, a sudden spike in yields, a bank that cannot meet withdrawals: any of these could move the debt from page A14 to the only thing anyone is talking about.<\/em><\/p>\n\n\n\n<p><em>Washington has shown no real appetite for getting ahead of this. The most recent budget proposal from the White House would push defense spending past $1.5 trillion while leaving the structural deficit untouched. Congress has yet to advance any serious plan to bring annual deficits below the 3 percent of GDP benchmark that economists across the political spectrum agree is sustainable. Both parties have signed off on the binge, and neither has taken responsibility for the bill.<\/em><\/p>\n\n\n\n<p><em>This issue will not&nbsp;be&nbsp;solved until the American people&nbsp;force&nbsp;it&nbsp;to be&nbsp;solved. That is the work in front of us, and it is the work we are going to keep doing\u2026<\/em><\/p>\n\n\n\n<p>Respectfully\u2026 from No Labels\u2026<\/p>\n\n\n\n<p>AR<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A message from the bipartisan No Labels, as sent in an email this past week from Ryan Clancy, the Chief Strategist. This is good. Also concerning\u2026 This week,&nbsp;Fortune ran a feature&nbsp;on the No Labels booklet&nbsp;Nightmare on Main Street, our oral history of an American debt crisis told from the vantage point of 2029. The piece &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/intramuralist.com\/?p=16288\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;anatomy of a debt crisis&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-16288","post","type-post","status-publish","format-standard","hentry","category-current-event"],"_links":{"self":[{"href":"https:\/\/intramuralist.com\/index.php?rest_route=\/wp\/v2\/posts\/16288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/intramuralist.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/intramuralist.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/intramuralist.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/intramuralist.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16288"}],"version-history":[{"count":2,"href":"https:\/\/intramuralist.com\/index.php?rest_route=\/wp\/v2\/posts\/16288\/revisions"}],"predecessor-version":[{"id":16291,"href":"https:\/\/intramuralist.com\/index.php?rest_route=\/wp\/v2\/posts\/16288\/revisions\/16291"}],"wp:attachment":[{"href":"https:\/\/intramuralist.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/intramuralist.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/intramuralist.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}