In a move that defies both arithmetic and basic shame, the federal government has decided that crossing the $40 trillion debt threshold deserves a celebration. The Treasury Department has announced plans for a gala-style event to commemorate the occasion, funded entirely through a new financial instrument economists are calling “money we will definitely figure out later.”
The festivities come at an awkward moment. Borrowing costs have been rising as the Fed’s brief flirtation with rate cuts proved to be just that—a flirtation. Markets are now pricing in the reality that interest rates will stay sticky, which means every dollar the government borrows gets more expensive. It is a bit like throwing a champagne reception to celebrate your mortgage payment doubling.
Economists who actually study this stuff are making concerned noises about the debt level itself. The usual suspects worry that at some point, interest payments on borrowed money become so large they crowd out spending on, you know, roads and schools and other quaint 20th-century concepts. But the government’s response has been to treat $40 trillion like a birthday and invite everyone to pretend the bill is not real.
The irony is almost too perfect to be accidental. As borrowing becomes more expensive and the debt load becomes harder to ignore, the official response is to have a party. It is the financial equivalent of celebrating a failed diet by ordering dessert on credit.