Just six months ago, the nonpartisan Congressional Budget Office (CBO) projected that the fiscal year would end with a federal debt of about $39.4 trillion. However, debt is accumulating much more quickly than expected, and the CBO now calculates that the federal deficit will hit the $40 trillion mark this week, according to the Washington Post. The week started with a federal debt of $39.9 trillion.
Last year Congress set the debt ceiling at $41.1 trillion, but analysts warn that this debt limit will be breached by early next year. If Congress were wise, it would implement a LaRouche-style reorganization of the entire cancerous, unpayable debt and speculative bubble. However, insiders expect Congress to again “kick the can down the road,” by raising the debt limit.
The CBO blames many factors, including the July 2025 “One Big Beautiful Bill Act,” which added $4.7 trillion in projected deficits over the next ten years. This year, the federal government is expected to spend nearly $2 trillion more than it takes in, according to a February CBO report.
Another problem high on the CBO list is the Iran War, which, the CBO states, is driving investors to dump 30-year U.S. Treasury bonds. In order to keep investors, the Treasury Department is now offering the highest interest rates in over 20 years. This year the federal interest payments alone will be over $1 trillion. The Bipartisan Policy Center, a nonpartisan Washington think tank, warns that with this level of military spending, “Our current fiscal trajectory is plainly unsustainable, and that’s the best-case scenario… any number of other events could quickly push us over the edge from a challenge into a full-blown crisis. Even in the rosiest scenarios, we’re speeding toward a cliff and refusing to turn the wheel.”
An additional big factor was President Trump’s “Liberation Day” tariffs, which were expected to bring in $250 billion in revenue in 2025; instead they became a liability in 2026, requiring over $100 billion in refunds for the unlawful tax.
