With annual interest expenses on the federal debt now exceeding the defense budget—and on pace to surpass Social Security—has the situation reached a tipping point?

Doug Casey: People have been observing this trend since the late 1960s; the idea of the federal debt getting irredeemably out of control isn't new. But I think that we've finally reached a genuine tipping point.

In other words, when you keep racking up debt at interest, with growing deficits every year, bankruptcy is inevitable. But now it's also imminent.

90% of the US government's spending is baked in the cake. It's not just that the spending is mandated by law and enthusiastically promoted by the agencies that dispense it. Government spending has totally corrupted the country, from welfare moms to giant corporations. They'll all squeal like stuck pigs if the spending stops. I expect the accumulated distortions it's caused to come unglued in the next few years.

International Man: President Trump has appointed Elon Musk to run the Department of Government Efficiency (DOGE).

Do you think it will have any meaningful impact on the US government's financial problems, or is it just a token gesture to distract and entertain the public?

Doug Casey: I think that Trump is sincere, as are Elon and Vivek. But what we're dealing with are absolutely massive entrenched programs. What's worse, Trump has promised that he would not alter Social Security, Medicaid, Medicare, and military spending. Those things alone add up to something like 80% of the federal budget. It's very hard to get the number exactly, because the US government's accounting is so complex. I'm reminded of Defense Secretary Rumsfeld's comment on 9/10/01, saying that the Pentagon couldn't track $2.3 trillion of spending.

On top of those things, you have to add the interest on the official national debt, which is over a trillion dollars a year. That debt is absolutely going higher as the debt burden grows, compounded by rising long-term interest rates. I'm not even counting another perhaps $150 trillion of contingent liabilities and off-balance sheet debt.