Debt. Death. Spiral.

David Friedberg, the most mild mannered of the All-In Podcast ensemble, sounds off on the crisis no one's acknowledging.

Policy Recommendation:

1. Line item out all new spending.

2. All programs go back to pre-covid levels of funding.

Original Proposal: All-In Podcast, David Friedberg, Ep. 288

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Think about it like this: your friend already owes you $1,000 and comes back asking for more. You’d probably ask a few questions, right? Am I'm getting back my original $1,000? Do you need help?

Your friend responds: “I’m in more debt than before, I make less money, and I got a new credit card to cover the interest payments on the old ones.”

That’s us. We’re that friend.

Big deficits spook investors, so they demand higher yields to lend us money. That spikes our interest payments, which adds to the debt. Meanwhile, rising costs and falling tax revenue mean even more borrowing. Round and round we go—the debt, death spiral Friedberg called out.

1. Deficits

   The US is spending $2.5 trillion more than we earn in taxes. This deficit is 8% of our GDP, a historic high. In plain english, Friedberg explains, "8 cents of every dollar that moves in every traction in this country is being used to pay down interest on money that we overspend in the past."

   

   
   

2. Investors Get Nervous

   The 30-year yield on US Treasuries captures how people think about our future. Higher yields mean there is little demand for US debt. To attract buyers, we raise the rate of interest we pay the lender. Yields are currently almost 4x their pre-Covid level.

3. Higher Yields Make the Debt Worse

   In June of 2016, yields were only 1.6%, meaning we paid $514 Billion in per quarter in interest. Today, yields are 5.14%, extracting $1.1 Trillion per quarter. That’s more than we spend on defense, education, and Medicare.

4. Spiraling

   More borrowing → higher rates → more interest → more borrowing. Eventually, the only way out is: cut spending, raise taxes, or inflate the debt away (which crushes everyone else financially).

   
   

   The spirit of DOGE is gone. Our recently approved budget will add another $3 trillion to the deficit. It lowers projected tax revenue (thanks to tax cuts) and increases spending in nearly every category—including Homeland Security, the military, and the judiciary.

   
   

   There are cuts, but they’re drops in a bucket. SNAP and Medicare will see less funding as we look to push SNAP costs onto states and move to require employment for all able-bodies people with no dependents looking for Medicare. Recipients of Medicare will also be subject to bi-annual eligibility checks to ensure they still they still qualify for the benefits.

   

   
   

Friedberg sums up our politics bluntly:

“Every year, politicians want to get re-elected by keeping the money flowing. They want to fund new programs they can brag about on CNBC. But there’s no future of America if we’re burning $2.5 trillion a year.”

If we had the political will, Friedberg's advice to return to pre-COVID spending and audit every line item would be a great start.

Until then, we need to recognize the dire path Congress keeps us on—masking a $2.5 trillion problem with billion-dollar soundbites. As their employers, we should reward fiscal responsibility, not empty promises. Until then, we’re just the friend still drowning in debt… and still asking for more.