We just crossed the $37 trillion debt mark. Did you notice? Nobody else did either.
It happened with all the fanfare of a tree falling in an abandoned forest—not even a decent headline in most papers. Meanwhile, the war machine is powering up again, and Wall Street is somehow managing to shrug off both developments with its characteristic blend of selective amnesia and that peculiar brand of pathological optimism that keeps traders' blood pressure mysteriously normal.
Let's be real for a second. Thirty-seven trillion dollars. It's worth taking a moment to appreciate the sheer scale of what that actually means. If you started spending a million bucks every single day, you'd need over 101,000 years to work through this sum. The Romans would have needed to start saving around the time Homo erectus was walking the Earth just to cover our current tab.
It's the kind of number that's so astronomically large it becomes almost meaningless—which might explain why markets barely blinked when we crossed this particular Rubicon.
I've been covering debt ceilings, fiscal cliffs, and budget showdowns since the Obama administration, and honestly? They've started to take on the quality of a particularly tiresome soap opera. The plot never advances but the stakes supposedly keep rising. Remember when hitting a trillion dollars in debt was considered shocking? Those were simpler times.
The irony here is just... exquisite.
We've spent years treating government debt as simultaneously the most urgent crisis facing the nation and something we can indefinitely ignore. It's fascinating to watch. Politicians deliver stern warnings about fiscal responsibility immediately before approving whatever new spending package lands on their desk. It's like watching someone deliver an impassioned speech about the dangers of alcoholism while mixing themselves a martini.
What's truly bizarre (and I've seen this pattern repeat through three administrations now) is how the debt-to-GDP ratio has become a political football rather than an actual economic indicator. When the "wrong" party is in power, debt is existential; when the "right" party holds the purse strings, deficits don't matter a damn bit. This partisan approach to fiscal policy has created a situation where we've essentially agreed to pretend that math works differently depending on who's sitting in the Oval Office.
And now, look—a new military conflict appears to be on the horizon.
If there's one thing America excels at, it's finding new theaters for our particular brand of expensive interventionism. The military-industrial complex that Eisenhower warned about hasn't just survived; it's become so embedded in our economic structure that war has become something like a countercyclical stimulus program. It's our version of infrastructure spending, but with explosions.
I spoke with three economists last week about this very issue. Not one would go on record expressing serious concern.
The market response to all this? A collective yawn. Bond yields remain remarkably tame considering the fiscal picture. It's as if the debt markets have developed Stockholm syndrome, convinced that their captor—the U.S. Treasury—must know what it's doing. The dollar maintains its reserve currency status through what appears to be sheer force of habit rather than fundamentals.
There's a model I've been thinking about lately. I call it "fiscal consequence displacement." The basic idea is that the expected market penalties for fiscal profligacy keep getting pushed further into the future, creating a form of moral hazard where policymakers have no incentive to address structural problems. Every time we avoid the predicted catastrophe, it reinforces the belief that we can continue avoiding it indefinitely.
The thing about this model is that it works perfectly until it suddenly doesn't. Just ask any former empire throughout history.
(Though I suppose they're not taking questions anymore, are they?)
Look, I'm not suggesting we're on the verge of fiscal collapse—that particular prediction has been wrong too many times to count. But there's something deeply unsettling about watching the world's financial superpower continuously increase its leverage while simultaneously finding new ways to expand its military commitments.
What's the endgame here? I honestly don't know.
Perhaps those Modern Monetary Theory proponents are right, and a sovereign currency issuer really can sustain these levels of debt indefinitely. Or maybe—just maybe—we're building a fiscal house of cards that will eventually succumb to the laws of financial gravity.
Either way, the combination of record debt and new military adventures should at least merit more than a passing glance from markets that are supposedly efficient processors of information. The fact that it doesn't tells you everything you need to know about how distorted our financial system has become.
In the meantime, I'll keep watching the debt clock spin ever upward while politicians assure us that fiscal responsibility is their highest priority—right after they approve the next spending package.
