The United States now owes more money than its economy generates. Other than during the Covid pandemic and borrowing to pay for World War II, it’s never happened before. This shouldn’t be a surprise. Indeed it was totally predictable. Our President has a history of borrowing more than he can repay and his Republican puppets won’t stop his profligacy.
He put his five casinos and the iconic New York city Plaza Hotel into bankruptcy. At least 60 lawsuits document Trump stiffing employees who worked at his real estate ventures. There finally came a time when no U.S. bank would lend to Trump. International Treasury buyers are likely to follow suit or, at least, demand higher interest rates.
This time he’s putting the U.S. Treasury on the hook risking: a default on America’s sovereign debt, the need to cut America’s safety nets to pay debt, a recession in the next 12 months and, frightfully, Trump mismanaging it into a depression.
A default on U.S. Treasury debt and a depression would be highly unlikely if you could assume a rational President, Republicans that have the courage to reign him in and a qualified cabinet. Tragically, not one of these assumptions can be made.
In normal times, the risk for a recession in any 12-month span is between 15% and 20%. Moody’s Analytics, however, has raised the risk to 48.6%. While other estimates range between 30% and 45%, the risk is likely to rise rapidly if the conflict in the Middle East is prolonged or becomes more severe.
The likelihood of a recession falling into a depression is more worrisome now. It was international cooperation that prevented the Great Recession of 2008 from becoming another depression. There will be none of that next time. Trump has alienated all our allies by bombing Iran without consulting them, by launching surprise tariffs, and his allegiance to Putin threatens all of Europe.
The international cooperation he’ll need won’t be there, just like it wasn’t there when he asked our allies to help clear the Strait of Hormuz. Moreover, Trump’s not one to compromise – only his opinions have any value.
To repeat, the United States now owes more money than its economy generates. Leading up to the Great Depression of 2008, US debt held by the public was 35% of GDP. Now it’s more than 100%, so borrowing to recover from a recession will be much more challenging.
It was Presidents Bush’s and Obama’s cabinets and advisors, who helped save us from a depression in 2008. They were expert and experienced in international economic and monetary policy. Trump’s cabinet has no such expertise or experience. They are the most unqualified and dangerous cabinet in America’s history, more like school children planning mischief, and they’re there only to condone Trump’s every decision.
When the Great Depression hit in the 1930s, the US was a large creditor nation. We’re now a large debtor nation, having borrowed more money than GDP can generate. In May 2026, total U.S. debt reached $39 trillion so Congress had to raise the debt ceiling to $41 trillion to replace the tax revenues lost from Trump’s tax cuts for the wealthiest Americans.
How would Trump respond to a depression? The same way he responded to the Covid pandemic. He’ll assure us that it is “going to disappear. It’s like a miracle — it will disappear.”
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