Our $40 Trillion Asterisk*
* Instead of paying attention to serious economic issues, we’re building a gaudy ballroom, alienating our allies, and solving a voter-fraud problem that doesn’t exist.
By Chuck Melvin
First published on JSOnline.com on Sept. 12, 2026
So I stopped at the local Chase Bank the other day to ask about refinancing my mortgage, maybe consolidate a few bills into one easier payment. A nice loan officer wondered how much I was looking at.
“A little over $40 trillion,” I said.
No, this didn’t actually happen. But I did the math anyway. As it turns out, the payment on a typical 30-year, $40 trillion mortgage would be about $250 billion a month — slightly more than I’m willing to pay.
It’s also more than all of us, collectively, seem willing to take seriously. So we keep falling deeper and deeper into the hole: We broke past $40 trillion in total federal debt on Aug. 18. And we keep failing to make the tough choices that might slow the downward spiral, such as raising taxes on the wealthy, trimming Social Security, or reducing defense spending.
Elon Musk would go broke paying the interest.
During the fiscal year ending in September 2026, we will have spent roughly $1 trillion just on the interest payments we owe to people who have lent us money over the years. That’s 14% of total federal spending this year — more than we spend even on defense.
Our top four expenditures for fiscal 2026 line up approximately like this, according to Congressional Budget Office projections:
Social Security: $1.7 trillion
Medicare: $1.1 trillion
Net interest on the debt: $1.0 trillion
National defense: $885 billion
How did we get into this mess?
Wait! I’m not saying this is necessarily a mess. Debt can be a good thing. I wouldn’t own a house if I hadn’t been able to get a mortgage. Debt lets us buy things now and pay for them later — a house for me; fighter jets and a gaudy White House ballroom for all of us. If we borrow wisely and have the income to make our payments on time, everything works out.
Problems arise, though, when we don’t collect enough to pay the people we owe. The bank could take my house away.
Much worse things will happen if we ever default on the national debt — for example, if we can’t pay off the Treasury bonds we sold to investors in Japan, to Vanguard and Fidelity mutual fund holders, to the Social Security trust fund.
Economists insist that I point this out.
The national debt isn’t like a mortgage in many ways, including this: It doesn’t have an end date like a 30-year mortgage does. Instead, it just keeps rolling over, year after year. And because our expenses almost always go up, we keep borrowing more, and the debt gets bigger. Incomprehensibly bigger.
Just since President Donald Trump took office in January 2025, the national debt has gone up more than 10%, a stunning $3.8 trillion, in spite of his mean-spirited and unproductive chainsaw-culling of federal workers. To be sure, that deficit isn’t all Trump’s fault, although his so-called “one big, beautiful bill” will make things a lot worse in the years to come — trillions of dollars worse. It has already started doing some damage.
But if you have to point a finger at someone causing a lot of our financial trouble right now, blame boomers (like me) for having the nerve to get older and collect Social Security.
Again, though, this is all fine in theory, as long as our economy keeps growing faster than the debt. More income from a healthy economy means we collect more in taxes and can afford to make higher payments.
So even today’s massive debt is OK — except when it’s not.
Unfortunately — and please pay close attention here — our economy isn’t keeping up. It almost never does, under Democrats or Republicans.
One important way we measure the overall picture is the debt-to-GDP ratio: comparing the size of our debt to the size of the national economy (the gross domestic product). GDP is an estimate of the total dollar amount of the stuff we make, sell and do, such as cars, beer, fighter jets and farming.
In 1976 (50 years ago), the debt equaled 33.6% of our GDP.
In 2001 (25 years ago), the debt was 54.5% of GDP.
Today, the debt is 123.3% of GDP.
That last number is a record for a non-pandemic year, a really bad record, the worst gross debt-to-GDP figure we’ve ever measured (aside from a COVID-19 spike to nearly 126% in 2020; let’s give Trump a mulligan on that one).
The old record was set in 1946, right after we sold bonds by the truckload to pay for World War II, when the ratio hit 119.1%. But I think we can all agree that there were solid reasons for that one — such as stopping Hitler — and the figure improved as soldiers came home and factories that had been churning out tanks and jeeps switched back to making cars, couches and highways. Plus lots of babies were born.
Today we have no noble reason for overspending. No COVID. No Hitler. Plus we aren’t making babies like we used to, our homegrown workforce is growing too slowly, and we aren’t importing enough immigrants to make up the difference.
Yet instead of paying attention to those and other serious economic issues, we’re building a ballroom, alienating our allies, solving a voter-fraud problem that doesn’t exist, and pushing prices higher with crazy-random tariffs, all while running our military ragged on an expensive war that no one can explain rationally.
Bottom line: We’re spending about $2 trillion a year more than we take in. Last year alone, our economy grew a meek 2.1%, not nearly enough to keep pace with our 6.1% increase in debt.
So we owe $40 trillion and growing. Most of it is owed to domestic investors (Americans with mutual funds, government entities like the Fed and Social Security). About a quarter of it is owed to foreign investors all over the world, including Japan ($1.2 trillion), the U.K. ($880 billion) and China ($690 billion).
There’s never a silver bullet when you need one.
The simplest solution? There isn’t one. While it’s clear the debt is out of hand, today’s political climate — everybody hates each other — means Republicans and Democrats aren’t going to be gathering over cocktails to solve this.
But if we can get their attention, here are a few things we should do sooner rather than later:
1. Raise taxes on high-income and high-net-worth Americans. Why? Because they have all the money. Really, nearly all of it. First step: Reverse the 2017 and 2025 Trump tax cuts that are mostly benefiting rich people and corporations while sending the country deeper into debt. (That’s right, we’re forcing unprecedented debt onto our children so rich people can get richer. Very patriotic.) Second step: Stop letting very wealthy folks dodge taxes by using their wealth as collateral for loans that don’t count as income.
2. Stabilize Social Security. First step: Eliminate the provision that lets people stop paying the Social Security tax when their income gets too high. This is a safety net now, not a savings account. Second step: Reduce the system’s annual cost-of-living adjustment by basing it on a more realistic measure of inflation.
3. Lower health-care costs. One of many steps: Rethink the Medicare Advantage program, which costs us way more than ordinary Medicare and makes a fortune for the insurance companies who bombard us with TV commercials.
4. Reduce defense spending. We can still have the most powerful military on Earth, by far, without spending like drunken sailors.
The best remedy of all would be to grow our economy faster than the debt, but that almost never happens. It’s especially unlikely now in a global economy that our current leaders in Washington seem determined to divorce.
Keep that in mind if they let you vote in November.