Every so often, I look up from daily noise and check how the U.S. debt is doing.

For most of the postwar era, federal debt was boring in the best possible way. Boring meant safe. Boring meant Treasuries were treated as the world’s risk-free asset. Boring meant the dollar was trusted, the U.S. government could borrow cheaply, and the American state could fund wars, bailouts, entitlements, military bases, and global hegemony without immediately feeling the cost. Oh, and the "American Way of Life"™

You want debt to stay boring, because when sovereign debt becomes interesting, ordinary people start living in interesting times.

The bad news is that the U.S. fiscal position is becoming interesting very quickly.

As of mid May 2026, total U.S. public debt outstanding is about $38.94 trillion, including about $31.27 trillion held by the public and about $7.67 trillion in intragovernmental holdings. The federal government’s interest burden is now in the trillion-dollar zone: BEA/FRED data show federal government interest payments at about $1.219 trillion annualized in Q1 2026, while CBO-based budget estimates put net interest at about $1.0 trillion in 2026, rising to $2.1 trillion by 2036.

Gross or annualized interest measures are already over $1.2 trillion. Net interest, the standard budget measure, is closer to $1 trillion. Either way, the direction is the same: the interest bill has escaped the background and become one of the central facts of our federal budget.

This was not normal even a few years ago. Before 2023, federal interest payments were roughly in the neighborhood of half a trillion dollars or less. Then the combination of higher debt, higher refinancing costs, and persistent deficits turned what had been linear growth into a soft exponential.

CBO’s current baseline is already ugly. It projects a $1.9 trillion deficit in fiscal year 2026, rising to $3.1 trillion by 2036. Debt held by the public rises from 101% of GDP in 2026 to 120% by 2036, higher than just after World War II, the previous record. Yet, there'll be no turnaround like back then, no draw-down, the debt will continue climbing after that, reaching about 175% of GDP over the following two decades.

That is the official baseline. Not this collapsenik's fevered dream. Not some prepper with canned beans and a shortwave radio. The Congressional Budget Office is saying the United States is already on a path where debt keeps rising faster than the economy. And guess where that heads?

Some say the headline debt number is misleading because part of it is money the government owes itself. Economists usually focus on debt held by the public because that is the portion competing in financial markets and affecting interest rates, private investment, and investor confidence. Penn Wharton Budget Model made a big whoop of exactly that point in 2023 when it noted that gross public debt included about $6.8 trillion in intragovernmental debt and there was "only" about $26 Trillion of debt otherwise. And yet, 2 years later, we're up almost that amount, from $33.2 Trillion to $39.2 Trillion. Those few intragovernment trillions seems like less and less the saving grace.

However, intragovernmental debt still counts. A large part of it represents promises to programs like Social Security. Promises that eventually have to be honored through taxes, benefit cuts, more borrowing, inflation, or some combination of it all. “Money we owe ourselves” does not make the obligation disappear.

The real danger is not that the United States wakes up one morning and the dollar instantly becomes Monopoly money. The danger is more a spiral we're entering.

Higher debt raises interest costs. Higher interest costs enlarge deficits. Larger deficits require more borrowing. More borrowing can push rates higher. At some point, the fiscal machine starts eating its own output.

That is the debt drain everyone assumes someone will solve later. Kick the can down the road. Again. And again.

Penn Wharton’s 2023 analysis argued that under favorable assumptions, U.S. debt could become unsustainable within roughly twenty years, and sooner if markets begin to believe Congress will not correct course. That matters because markets do not wait for spreadsheet deadlines. A fiscal crisis arrives when confidence changes, not when a model politely says time is up.

This is where the debt story connects to empire.

The American imperial model depends on three assumptions: the dollar remains trusted, Treasuries remain the world’s safest collateral, and the U.S. military can keep the system open at tolerable cost. All three assumptions are now under pressure.

Since World War II, and especially since Vietnam, the U.S. has relied on extremely expensive advanced weapons platforms to dominate conventional military conflicts. That model worked best when America’s opponents either lacked the technology to strike back cheaply or needed very favorable geography and huge human sacrifice to resist.

That's changed.

Russia’s Three day Special Military Operation is now at day 1,542. Thanks to cheap drones, missiles, sensors, mines, and dispersed systems, large legacy militaries are starting to become like the big expensive cavalry of the 19th Century encountering trenched WW1 machine gun fire for the first time. The men learned the lesson quickly but it took a long time to hammer into skulls of the oldtime Generals. Welcome to Gerontocracy.

Now the U.S. has its own version of the problem with Iran and the Strait of Hormuz.

That is the new imperial math. It does not matter whether America technically wins or loses every confrontation. If protecting the dollar system becomes unfeasible or dramatically more expensive, then the empire has already lost what makes it work.

China or India does not need to build a dozen carrier strike groups anymore. It can invest in specialized drones and missiles for a fraction of the cost. Sink a $13 billion (with $120 billion R&D) Carrier with a few millions of Drones/million strike force, and then the American Projection of Global Power dies almost overnight. Make me wish we took our win at Venezuela and left it at that. Remain, militarily, a winner in everybody's minds for a bit longer.

And if the carrier doesn't sink this time around, guess what? A light cheap drone is going to have at least a thousand improvement iterations before they even think of updating a carrier every 20-25 years.

But now, this matters because of Taiwan. It matters because of Hormuz. It matters because of every chokepoint and alliance commitment the U.S. has accumulated over decades of assuming that its fiscal and military technological advantages were permanent.

Meanwhile, the federal budget is being squeezed from every side.

If interest costs keep rising, the choices become brutal. Cut military spending, cut domestic services, cut Social Security and Medicare, raise taxes, inflate the debt away, or borrow even more. Cutting the military runs directly against the logic of empire. Cutting Social Security and Medicare runs directly into electoral reality. Raising taxes runs into political revolt. Borrowing more worsens the disease. Inflation is default by another name, just slower and less honest.

This is why the situation is so fucked. The hard default probably isn't happening on any one politician's watch. It'll be a rolling degradation of a more expensive yet shittier life. Worse than your grandparents and parents. Hell, worse than a decade ago. Or even last year. Or last week.

The hard financial limit may be twenty years away on paper. But the crisis does not need to wait until CBO's 2047 or 2056. U.S. empire, as we have known it: debt-financed global dominance backed by cheap capital, military primacy, and unquestioned dollar privilege will break far sooner than that. It breaks before 2040. Possibly in less than a decade depending how the stock market bubble and AI implosion happens.

Militarily, we're fine on the defense but projection of power is going to become untenable in the near future. Financially, we're strapping ourselves all in into a situation we cannot win - but the military industrial complex won't back down. Politically, we're isolating ourselves more and more. "'Merica doesn't need you or anybody!" That level of hubris we didn't even have when we were the only ones holding nukes for a short period of time.

I used to think Chris Hedges was being a optimistic pessimist by declaring American Empire dead by 2030. Now I think he has a 50/50 shot of being shown correct.