John,
Yesterday, we hosted a conversation with Jim Millstein, a former senior U.S. Treasury official who led the restructuring of major financial institutions like AIG after the 2008 financial crisis. This is someone who was on the frontlines of combating the worst economic calamity since the Great Depression – which is why his take on America’s national debt was so sobering. He believes America could face a massive crisis in the next few years if Washington does not act.
His message was blunt. The United States is running a $2 trillion deficit this year. Over $1 trillion of that will go just to interest payments, now the second-largest category of federal spending after Social Security.
That interest burden is not going away. It is getting worse. Over the next twelve months, the Treasury will have to refinance $10 trillion in debt. If interest rates keep rising, we are headed into what Millstein calls a debt spiral, a vicious cycle of higher borrowing and higher interest payments with no end in sight.
This is not a theoretical problem. If we fail to act, Americans will see the consequences everywhere: higher mortgage rates, rising costs on car loans, and an economy hobbled by political paralysis. As Millstein put it, “Congress should be embarrassed.”
In a guest column this week on our website, Les Rubin, an accountant and entrepreneur who founded Main Street Economics, drives the point home. He compares our fiscal situation to a ship heading toward disaster: “The USS Titanic is sinking,” he writes. “And most citizens do not realize how serious the problem is.” Rubin’s full article, which you can read HERE, is as lively as it is urgent. We are spending as if there is no tomorrow, and if we keep going like this, there may not be.
Even as No Labels educates our community on the gathering threats facing the country, we are continuing our critical work to help our elected leaders find common ground.
On June 26, we are bringing members of the House and Senate together for a Make Congress Work meeting in the U.S. Capitol. Their goal: to begin an honest, public conversation about how to move forward together as one nation. This is just a start and Congress has so far to go to meaningfully address America’s challenges. But they will never get there unless they are willing to first sit in a room together to talk.
So here is what we are asking from you:
RSVP for the virtual event. This historic meeting will be streamed live, and we want you there.
