The U.S. national debt recently surpassed $40 trillion—a milestone that generated headlines in the press but shrugs among many liberals. 

“Milestones are milestones: They measure, and they help pass the time,” wrote economist James K. Galbraith wrote in The Nation last week. “Otherwise, they have no intrinsic importance.”

“Progressive deficit hawks” are about as rare as snowballs in July. Many progressive ideas, like “Medicare for All,” are eye-wateringly expensive and incompatible with notions of austerity. Many liberals remain enamored of “Modern Monetary Theory,” the somewhat wacky idea that because governments can print more money, deficits don’t really matter. Others acknowledge deficits as a significant problem, but see it as leverage for raising taxes on the wealthy, rather than as an impetus for structural reform.

Granted, progressives are justifiably skeptical of the doomsday rhetoric we’ve heard for decades now from the green-eyeshade types at various budget watchdog groups. The sky has not, in fact, fallen. Yet.

Conservatives have moreover been appallingly hypocritical in their alleged concern over the nation’s finances. At the same time they’ve used deficits as a pretext for cutting social programs, they’ve pushed budget-busting tax relief for billionaires. President Ronald Reagan, for instance, complained of “welfare queens” stealing government money and slashed welfare spending mercilessly. He then added $1.8 trillion to the national debt through tax cuts.

President Donald Trump has likewise bemoaned widespread “fraud” in programs like Medicaid to justify draconian cutbacks in funding. Yet the “One Big Beautiful Bill” passed last summer includes enormous tax breaks for the wealthiest Americans, which will add another $3.4 trillion in deficits over the next 10 years. We have, however, now reached a point where the nation’s fiscal crisis is real. Plenty of terrific analyses have dissected America’s destructive budget trajectory (including one from economist Rob Shapiro at the Monthly this week). So I’ll just underscore two practical reasons why liberals need to get serious about the national debt. 

• The amount we pay just for interest on the debt makes progressive priorities unaffordable.

Interest on the debt is what we pay to creditors for the privilege of borrowing money. According to the Congressional Budget Office, this amounted to an astronomical $970 billion in 2025—more than what the federal government spent on defense, much more than what was spent on Medicaid, and almost as much as federal spending for Medicare. While some liberals have called for reductions in military spending to cut costs, even zeroing out the defense budget wouldn’t produce the savings needed to pay the nation’s creditors, let alone fund new programs. 

Interest costs alone will total $16.2 trillion over the next 10 years—or about four years’ worth of financing for “Medicare for All.” Money wasted on borrowing costs means less money for liberal wishlists. 

• More national debt means higher interest rates, which will worsen the “affordability” crisis. 

America’s ballooning debt has also made us less attractive to creditors, who are now demanding higher returns on their investment. (This is much like credit card companies charging higher interest rates to borrowers who carry over balances.) That’s why the yield on U.S. Treasuries (i.e., the interest rate) has been steadily increasing and is at its highest in 25 years. 

Higher Treasury rates in turn mean higher interest rates on consumer loans, including mortgages, car loans, and credit cards. Consumers are already getting squeezed. The Yale Budget Lab estimates that because of rising interest rates, a 30-year-mortgage on a median-priced home now costs an extra $2,500 a year compared to 2015. 

If progressives are serious about solving the affordability problem, they can’t overlook the cost of consumer debt, which in turn is tied to our nation’s fiscal health. 

Of course, the hard part is solving the problem, and unfortunately, simply undoing Trump’s tax cuts for billionaires will not plug the hole in America’s finances. Difficult choices lie ahead, but the catastrophe that awaits from inaction will be worse. 

Coming TOMORROW…

It’s almost that time of the year when we unveil the nation’s highest-performing colleges and universities on the metrics that really matter: affordability, student success, and contributions to the public good. 

In the meantime, check out these sneak peeks from our College Guide issue: 

• Kevin Carey offers a radically simple plan to solve the problem of college affordability. 
• Paul LeBlanc gives advice on how to pick a college in the age of AI.
• Bonus: Monthly intern Alex Bronzini-Vender bemoans the decimation of internships, thanks to AI. 

Don’t miss from the Monthly…

Punishing Putin—or rewarding Trump? The Progressive Policy Institute’s Tamar Jacoby warns that the Russia sanctions legislation championed by the late Senator Lindsey Graham and recently passed by the U.S. Senate may not accomplish its desired aim of helping to end Russia’s war against Ukraine. Worse yet, it gives unprecedented powers to Trump. The legislation hands the president sweeping authority to levy tariffs—a power Trump has already abused—and it gives Trump significant discretion in how and whether to levy sanctions. “The past two years offer a troubling preview of just how Trump is likely to use his presidential enforcement authority—for both the sanctions and the tariffs in the Graham bill,” Tamar writes. Read here. 

In defense of “the establishment.” As fashionable as it’s become to trash “the establishment,” this habit has become self-defeating, argues David Masciotra. Democrats are, after all, the party of good government, and unrelenting attacks on expertise undermine the rationale for governance. Democrats “should develop a more exacting criterion for separating accomplished leaders from office-holding hacks,” David writes. “The political party that believes in the ability of government to advance the causes of peace, shared prosperity, and social justice cannot affix a scarlet ‘E’ on anyone with experience working in government.” Read here. 

“Goodbye, Dolly.” Has there ever been an entertainer, songwriter, singer, entrepreneur, philanthropist, or all-American heroine like Dolly? “Dolly Parton was a woman of faith, hope, prayer, light, love, and laughter,” writes James Zirin his tribute to Parton, who died this week at 80. And above all else, Jim writes, she embodied a unifying vision of the American dream that will outlast our current polarized moment. Read here.

Plus…

• Author Susan Berardi shows how police drive the narrative in killings of unarmed motorists.
• Journalist Deanne Stillman reveals an unlikely champion of wild horse preservation: Richard Nixon.
• James Zirin notes how the Supreme Court’s inaction is allowing Trump’s illegal ballroom to get built by default. 
• Economist Rob Shapiro argues that policymakers should look to President Bill Clinton’s 1992 budget blueprint to get deficits under control. 
• I review Atlantic staff writer Annie Lowrey’s important new book, The Time Tax, on how bureaucratic hassle overburdens Americans’ lives. 
• Contributing Editor Jonathan Alter writes that all Republican incumbents deserve a “Scarlet A” for their slavish approval of Trump. 
• David Atkins defends the DNC.
• The Brookings Institution’s Elaine Kamarck chronicles the damage done by DOGE in the latest episode of the Monthly podcast.

Thanks as always for your readership, and we welcome your feedback! Leave a comment, or write to us at editors@washingtonmonthly.com. And if you’re reading this on our website, subscribe to our Substack here.

Have a great week! 

Anne Kim, Senior Editor