Corporate bankruptcies surged 11% in 2025, as business bankruptcies and shutdowns are skyrocketing due to rates, lingering inflation and rising costs.

Meanwhile, the stock market rides a wave of manic irrational exuberance, with the Shiller P/E ratio hovering around 40—echoing dot-com bubble worries—while everyone pretends AI will magically bail us out. But that same AI is the silent killer: already killing millions of jobs in finance, admin, healthcare, and beyond.

If you've been paying attention, you probably understand that you don't wait for the "official" emergency. By the time the news anchor says the word crisis, shelves are already bare and the lines are already long. Right now, the warning signs are everywhere. The federal government is borrowing at levels normally reserved for war or recession. Corporate bankruptcies and business shutdowns are through the roof. And most concerning, artificial intelligence is moving from "tool" to "replacement" faster than most workers, schools, and institutions can react.

The Fiscal Time Bomb: Deficits and Debt on the Rise

The Congressional Budget Office's new long-term outlook (released February 11, 2026) paints a familiar picture, but with less room to pretend it's normal. The deficit is projected at about $1.85 trillion (5.8% of GDP) for the fiscal year ending September 30, 2026, staying roughly flat in 2027 before widening over the next decade.

The deeper problem isn't just the annual deficit — it's the compounding cost of yesterday's borrowing. CBO projects that debt held by the public crosses 100% of GDP this year, exceeds post–World War II highs by 2030, and reaches about 120% of GDP by 2036.

Interest is the accelerant. The CBO warns that net interest costs rise as the debt load grows, and that by 2036, interest consumes 26% of federal revenue (up from about 19% this year). CBO Director Phillip Swagel summarized it bluntly: the "fiscal trajectory is not sustainable."

In the background are the drivers everyone knows and no one wants to touch: Social Security, Medicare, and Medicaid. CBO now expects Social Security's trust fund to be depleted in 2032, which forces Congress toward benefit cuts, tax increases, or a patchwork of both.

These projections assume no major policy changes, but critics like Sen. Jeff Merkley (D-Ore.) decry the "reckless and irresponsible" debt burden being passed to future generations. With interest costs higher than any year since 1940 as a share of GDP, the economy's resilience is in question. A sudden rise in rates—perhaps triggered by investor skepticism—could spiral into default risks, echoing warnings from economists about a destabilizing debt crisis.

CBO also breaks out the impact of recent policy changes under President Trump's second term: tax cuts widen the deficit over time, tariffs bring in revenue but carry legal uncertainty, and immigration restrictions reduce labor-force growth and tax receipts.

The reason this matters for "risk of collapse" is simple: high debt doesn't always cause a crisis — until it does. The trigger is often a loss of confidence that shows up as higher rates. And when rates rise on a mountain of debt, everything gets more expensive at once.