Robert Reich: Psst: What No One Will Tell You About the National Debt (But I Will)
Link: https://robertreich.substack.com/p/what-no-one-will-tell-you-about-the
As of March 31, our publicly held debt was $31.27 trillion, while America’s GDP in 2025 was $31.22 trillion. This puts the ratio at 100.2 percent, compared with 99.5 percent when the last fiscal year ended September 30.
That 100.2 percent figure will likely climb, because the federal government is running historically large annual deficits of nearly 6 percent of GDP, which add to the debt. The final tally will depend on Iran war spending, tariff refunds, and the strength of the economy.
Should you worry? Well, it’s not as if we’re heading into a depression. Passing the 100 percent threshold won’t suddenly cause the world to lose confidence in the dollar.
The real problem is that an increasing portion of our nation’s budget — and your tax dollars — is dedicated to paying interest on this growing debt. That’s money we don’t spend on education, healthcare, roads and bridges, social safety nets, or (if we actually needed more spending on it) national defense.
As the debt continues to grow, interest payments continue to soar. We’ll soon be paying more in interest on the federal debt each year than we spend each year on Medicare.
So, who exactly receives these interest payments? This is an issue you hear very little discussion about, because the wealthy and powerful of this country would rather you didn’t know.
You probably do hear that a chunk of our debt is held by foreign governments and foreign investors. That’s true, but they hold only about 30 percent of our debt. The rest — roughly 70 percent — is held domestically. That is, we pay the interest to ourselves.
And who, exactly, is the “ourselves” who receive these interest payments? The Federal Reserve holds part of this debt, state and local governments hold part.
But the biggest chunk — nearly half — is held by mutual funds, pension funds, insurance companies, and banks. And who owns them? The Americans who invest in these funds — and who thereby, directly or indirectly, hold Treasury bills.
And who, exactly are these Americans — the Americans who are directly or indirectly collecting a large amount of the interest we’re paying on the national debt? It’s the people at the top.
The richest 1 percent of U.S. households hold about 35.6 percent of all financial assets — shares of stock, corporate bonds, and Treasury bills — so it’s safe to assume they hold at least a third of all Treasury bills.
What’s wrong with this picture?
Robert Reich makes a few very important points in today's substack column. This affects ALL OF US! Please read the rest at the OP link....
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1.) They allot themselves obscene profits,... often with monopolistic practices,....
2.) They have loopholes written so they pay little to no taxes,... then year after year have Big Beautiful Bills written to give the rich more tax breaks and tax credits, causing deficits to rise to astronomical and dangerous levels,...
(which pushes taxes higher for everyone else and explodes the national debt.)
3.) Then to compound this abomination and insult - they then buy tax free governmental bonds and treasuries to cover day to day governmental costs,.. so they profit handsomely from the exploding national dept which they caused to happen in the first place.
The super rich making tons of money from contrived disaster capitalism - while the average Jane and Joe picks up the bill and costs to keep our government running and operational.
They get a free ride while we pay through the nose. Talk about who is who - and where the real "Welfare Queens" can be readily located as they desperately seek to remain hidden while erroneously pointing the finger of blame at everyone else.
That was never calculated into the budget because nobody knew about it when the budget was approved. The gap between what is paid to Uncle Sam in taxes, and what is spent on the various gov't activities, well, we're spending more than what's coming in.
No American business (or American family) could ever operate this way. We can only spend it if we make it first, but not Uncle Sam!
