Three years ago, I wrote a blog post called "Entitled to be ‘sangry'”. "Sangry” is what happens when angry and sad collide, which is how I feel every time I look closely at the US government's budget math. Back then, the debt ceiling fight had just ended, Congress still hadn't appropriated its budget, and I was mad that decades of inaction on entitlement spending were getting passed down to us and the next generation.

Three years later: still sangry, and the numbers are worse.

What's changed since 2023—the data refresh:

• Debt has kept climbing. Federal debt held by the public was 93% of GDP, while the Congressional Budget Office's (CBO) February 2026 outlook puts it at 101% of GDP this year, on its way to 120% by 2036 if nothing changes.

• The deficit is growing. CBO projects a $1.9 trillion deficit for fiscal 2026, or 5.8% of GDP. That's with the economy at full employment. Historically, deficits this size have been the exception, not the rule, and typically expanded during a recession.

• Interest costs set a record. Net interest on the debt is on pace to hit roughly $1 trillion this year and 3.3% of GDP (up from 2.4% in 2023), same as the previous high set in 1991. We're now spending more on interest than at any point in history except in 1991, as a share of what we produce.

The 10-year Treasury yield is sitting around 4.6%, near 20-month highs, as issuance keeps climbing to fund both the deficit and, more recently, a wave of AI-related debt.

As Stanley Druckenmiller wrote in his WSJ op-ed, "Let the Bond Market Speak": "Every basis point of artificial yield suppression is a subsidy to procrastination." In other words, policymakers leaning on the Fed or the bond market to keep rates artificially low are buying Congress more time to keep not dealing with the deficit. 

Which brings me to Jackson Hole. The Fed's annual symposium in Wyoming runs through August 29 this week. Kevin Warsh's first keynote as Fed Chair since succeeding Jerome Powell earlier this year will take place on Friday. Powell's habit of using Jackson Hole to preview policy,a tradition started by Ben Bernanke, got the market used to that. Volcker attended in 1982 with no formal chair speech to parse. Greenspan started speaking in 1989, but used it for big-picture philosophy, not previews. His one famous market-mover, a 1997 aside on Mexico, was an accidental slip. Bernanke changed that with his 2010 and 2012 speeches confirming QE2 and QE3, turning Jackson Hole into a stage Chairs could use to signal what's next. Powell leaned hard into that playbook.

I believe Warsh is closer to Greenspan than to Bernanke or Powell. Less about a deliberate signal, with more risk that an offhand comment gets over-read by a market still primed to parse every word. Between that and a bond market that's already nervous about fiscal discipline, the best outcome would be a “nothing burger.” If Warsh leans dovish, while the deficit keeps growing, that's a "subsidy to procrastination.” If he doesn't, rates likely stay higher for longer.

The debt buildup, the higher-for-longer rates, and the rolling deleveraging we're starting to see aren't surprise events. They're the product of decades of inaction finally showing up in the numbers. And it’s now exacerbated by issuance that is heating up on the US corporate side to fund the AI buildout, forcing competition for all debt buyers. US Treasury outstanding debt is estimated to increase by $2.3T in 2026, consistent with past trends, while US corporate debt issuance is trending to be more, $2.9T, and the highest in 10 years. 

When rates stay elevated, and supply is rising, pain from a debt burden somewhere is more likely. We believe it won’t be evenly distributed. It shows up first where leverage is thinnest: in the debt-fueled investments, in pockets of private insurance, and in parts of private credit that were underwritten assuming rates would not go up, or at least could come back down in time for refinancings. Those are the cracks to watch.

So what do you do with all of this? Same answer as three years ago, just more urgent: the thing you can actually control is your own balance sheet. In a world where rates stay higher for longer because nobody fixed the deficit, real assets—things with pricing power or a claim on hard value—are worth holding. Cash isn't free money when inflation and issuance are this persistent. Procrastination at the federal level doesn't have to become procrastination in your own balance sheet.