America has its viral AI doomsday essay. Now it has a debt version.
The report lands as the U.S. gross national debt recently crossed $39 trillion for the first time—a milestone reached less than five months after it hit $38 trillion. Net interest payments have already surpassed $1 trillion in fiscal year 2026, nearly triple the $345 billion paid in 2020, and have eclipsed defense spending for the first time in modern history. The Congressional Budget Office projects the federal deficit will reach $1.9 trillion in fiscal year 2026 and balloon to $3.1 trillion by 2036.
“Neither party has any credibility on the debt or deficit right now,” Clancy said. “We’ve been on a 25-year binge of spending increases and tax cuts, and both of them have signed off on it.”
“A couple of bad Treasury auctions doesn’t mean we’re in a crisis,” Clancy said. “But when you start to string enough of them together, it suggests we could have a real problem here.”
That means the knock-down, drag-out government shutdown battles that have become a Washington ritual are, in effect, a fight over a little more than a quarter of the federal ledger.
Meanwhile, the go-to political solutions don’t add up. Eliminating waste, fraud, and abuse—a perennial Washington promise—would be “a rounding error,” Clancy said.
“You could take $100 billion of waste, fraud, and abuse out of our annual budget, which would be a massive achievement,” he said. “That’s 5% of last year’s deficit.”
“When you look at history and you look at crises, debt crises, that tends to be the moment where really dangerous political actors can start to get some footing,” Clancy said.
“Washington really is not going to solve this debt problem until they’re forced to,” he said. “There’s no way something this big gets solved with one party alone. Can’t happen. Will not happen.”
That candor may be the most notable thing about Nightmare on Main Street: It isn’t a policy proposal. It’s a warning about what happens if there isn’t one.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, put it bluntly when the $39 trillion milestone hit: “Surpassing $39 trillion in gross debt is an embarrassing milestone that both parties have helped build over decades, and neither seems particularly interested in addressing it before we hit $40 trillion.” The Peterson Foundation projects that threshold will be crossed before this fall’s midterm elections.
Nightmare on Main Street is betting a vivid-enough picture of what happens after $40 trillion, $45 trillion, and $50 trillion might change that calculus. The Citrini essay briefly moved markets. No Labels is hoping this one moves Congress.
