As of March 31, 2026, government debt held by the public stood at $31.27 trillion, while nominal GDP over the prior 12-month period was $31.22 trillion, pushing the debt-to-GDP ratio to 100.2%. The federal government is currently spending $1.33 for every dollar it collects, running annual shortfalls near $1.9 trillion. If current policies remain unchanged, the ratio could climb toward 120% within a decade.
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The most direct consequence of the US debt burden is one already unfolding in the federal budget every day. The government now spends more on interest payments than on Medicare, national defense, Medicaid, veterans’ benefits, food assistance, transportation, and science. Interest costs reached $476 billion in 2022 and nearly doubled by 2025, hitting $970 billion. As a share of federal revenues, interest has risen to 18.5%, eclipsing the previous record set in 1991, and will likely reach 25.8% by 2036. Nearly a third of every income tax dollar collected goes to purely servicing existing debt, leaving less room for everything else the government is supposed to do.
That crowding effect spills directly into the lives of ordinary Americans. A typical 30-year mortgage costs over $500 more per month than it did in 2019. When the Federal Reserve cut rates by a full percentage point in late 2024, mortgage rates barely moved. This was because Treasury yields, pushed up by the government’s relentless borrowing, overwhelmed the Fed’s easing entirely. The same dynamic drives up auto loans, credit card rates, and small business borrowing costs. Washington’s appetite for credit is competing against every American who needs a loan, and Washington always wins that competition.
When Eric Schmidt, speaking last week to the University of Arizona’s graduates, rhapsodized about the coming artificial-intelligence revolution, some in the crowed jeered. “I know what many of you are feeling about that,” the former Google CEO said. “I can hear you.” Mr. Schmidt then continued with his prepared remarks: “There is a fear in your generation that the future has already been written, that the machines are coming, that the jobs are evaporating, that the climate is breaking, that politics is fractured, and that you are inheriting a mess that you did not create.” He went on to urge graduates not to let fear rob them of personal agency—a fine, saccharine message.
Where does Mr. Schmidt think young people got the idea that “the climate is breaking”? Where did the “fear” he laments come from? In part from the scores of climate-panic groups to which the Schmidt Family Foundation’s 11th Hour Project has granted hundreds of millions of dollars over the last 20 years. One detail particularly amuses: When 11th Hour first appeared, in 2006, it funded screenings of Al Gore’s “An Inconvenient Truth,” a documentary designed to terrorize viewers with 90 minutes of bleak prophecies, now happily exploded. The outfit, like scores of others founded and funded by other progressive billionaires, spends its resources opposing fossil-based energy and trumpeting the dangers of a warming world.
Mr. Schmidt exemplifies the propensity among a few tech titans to pretend they’d never urged anyone to panic about a coming climate apocalypse.
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But the people showing up at county council meetings to protest the construction of a data center didn’t for the most part come by their convictions the old-fashioned way, by reading and thought. These activists, many of them attached to 501(c)(3) organizations, got their talking points from national nonprofits supported by some of the same moneyed outfits the Schmidt and Gates foundations spent the last two decades bankrolling.
Call it the Busybody Economy. Organizations designed to worry about future calamities can be counted on to find new calamities to worry about. Data centers serve that purpose nicely: Like all large-scale building projects, they ruffle local feathers; and their purpose, unlike an airport or a shopping center, requires explanation and so lends itself to conspiratorial Facebook posting. That several big-name progressive nonprofits now call for a moratorium on data center construction—Bernie Sanders’s group Our Revolution, Greenpeace USA, Friends of the Earth, among others—does not surprise.
Tech billionaires—Laurene Powell Jobs, Jeff Bezos and Steve and Connie Ballmer come to mind—never guessed that the network of climate groups on which they lavished their millions would eventually turn on their industry. A truth too inconvenient to foresee.
Raymond Niles offers a First-amendment-like cure for cronyism. A slice:
The American solution [to the struggle and strife of organized religions] was to remove the prize. The government was not allowed to establish a church. It could not tax Baptists to build Catholic churches, or tax Catholics to support Presbyterian ministers, or favor one denomination over another through special legislation. Once the government had nothing to give, there was little reason to lobby it for religious spoils.
That is why there is no meaningful religious cronyism in America. Religious groups may argue about moral questions in public life, but they are not lined up in Washington demanding federal grants to build competing cathedrals. Congress has no religious cookie jar, so no one tries to reach into it.
Now compare that with the ongoing and intensifying scramble for economic favors.
Businesses, trade associations, unions, nonprofits, and industry groups spend enormous sums trying to influence Washington. Direct lobbying and campaign contributions hit $20 billion in 2024 and 2025. While this spending may not technically be considered bribery under the law, its mission is the same. Whether the money is given to finance campaigns, ballrooms, libraries, or more nefarious ends, its purpose is to influence government officials to regulate and legislate in their favor.
Reason‘s Peter Suderman explains that “Trump’s signature policies are pushing prices higher.” Two slices:
MAGA 2.0 would be predicated on a rejection, or at least a skepticism, of the free market, libertarian economics that Trumpian intellectuals insisted were hobbling the GOP. These ideas filtered up to the presidential ticket itself. In 2024, then-Sen. J.D. Vance (R–Ohio) told The New York Times that mainstream economists were simply wrong about the effects of clamping down on immigration and the deployment of tariffs, and that free market libertarians were out of touch.
In many ways, the administration has governed accordingly. No, Trump hasn’t abandoned capitalism entirely. But his second term has been a populist-statist-protectionist mishmash, with a heavy dollop of crony self-dealing.
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Voters see a direct connection between Trump’s policies and the worsening economic situation, and it’s not hard to understand why. There’s plenty of evidence linking Trump’s policies to higher prices and economic sclerosis, and the combination of tariffs and immigration restrictionism hasn’t led to the boom in domestic manufacturing jobs Trump used to predict. On the contrary, recent research by economists at the University of Colorado Boulder looked at labor market changes in areas highly affected by immigration raids and found that employment for low-skilled, native-born men dropped by 1.3 percent.
Notably, all three of Trump’s signature initiatives—the war, the tariffs, and the immigration crackdowns—have been implemented through the executive branch. They are all a direct result of Trump’s personal whims and preferences. Trump can’t blame Congress or a political rival for policies that come directly from him.
Domenico Ferraro writes knowledgeably about industrial policy. Two slices:
When considering industrial policy, one is reminded of the old saying “been there, done that.” It almost always begins with declarations of good intentions — strategic industries, jobs, national champions. If only these firms received sufficient support, the argument goes, they (and the nation) would flourish. Politicians and bureaucrats have repeated this claim for decades. And whenever someone points to the lessons of history, the response is the same: “This time it’s different.”
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It begins with subsidies — phase one. These initial measures often come with few conditions, meant to signal restraint: The government is simply providing support while strategic decisions remain with management. The state is not intruding; it is helping.
Disappointment inevitably follows. When results diverge from the plan, phase two begins: Politics enters the firm. Management is deemed incapable of delivering the desired outcomes. A question no one asks — at least not publicly — is why competent management would have required public support in the first place. The strategic plan, after all, is declared sound; only its execution is lacking.
Then comes phase three. Public money now justifies oversight. Officials visit plants, tour facilities, and interview managers and workers. Oversight rarely stops at observation. It soon leads to phase four: equity stakes. If the state is providing the capital, why should it not share in ownership?
If we put to one side the opportunity costs already incurred by such policies, phase five is where things begin to go badly. Boards and managers are no longer chosen for competence alone. They must serve the “state interest.” Political appointments replace managerial talent. The state, it is assumed, knows better.
