National debt: Why Congress no longer cares

“Now would be a very good time for Washington to bring back its debt obsession,” said Rogé Karma in The Atlantic. That’s because the perfect storm for turning the federal deficit into a “genuine crisis” has arrived. In recent years, the Federal Reserve has “raised interest rates dramatically in an effort to tame inflation.” Since that means the federal government has to pay higher interest on its bonds, “government payments on debt interest soared to $881 billion in 2024.” That’s more than the U.S. spent last year on national defense. At the same time, President Trump’s tariff policies have led “almost every credible” forecast this year to anticipate slowed economic growth. Then there’s Trump’s “big, beautiful,” and bloated budget bill, which would add “more than $3 trillion to the deficit over the next decade.” The warning signals are flashing red, and if Washington continues to ignore them, “very bad things can happen,” from 1970s-style stagflation to a panicked flight from U.S. Treasuries and a global financial meltdown.

So far, bond markets are showing concern but not panic, said Victoria Guida in Politico. The credit rating firm Moody’s slightly downgraded the safety of U.S. bonds, and investor unease pushed interest rates on those bonds above 5%. Still, if Congress doesn’t heed these warnings and “shift the trajectory” of the budget bill—which would add trillions of dollars in tax cuts “without also making politically painful spending cuts”—”something more painful” than a mild Moody’s downgrade could occur.