Debt crisis and the cost of political avoidance

[UNITED STATES] The debate over America’s national debt has reignited following the passage of the so-called “Big Beautiful Bill” in the House of Representatives on May 22. While some see it as necessary tax relief for working families, others warn it will dangerously swell the national deficit. NYU professor and popular commentator Scott Galloway has been vocal in his criticism, describing the bill as a reckless combination of tax cuts for the wealthy and spending reductions in critical social programs like Medicaid and SNAP.

At the heart of the issue is how rising debt affects government priorities. As the government borrows more, the cost of servicing that debt (interest payments) eats up a larger share of the federal budget, potentially squeezing out funding for essential programs like Social Security. Galloway points out that this financial pressure will only intensify, given projections that interest payments could reach $13.8 trillion over the next decade even without the bill becoming law.

Galloway also raises concerns about long-term wealth inequality. He argues that the bill’s provisions — especially its estate tax cuts — will deepen the wealth gap, allowing dynastic wealth to avoid taxation while shifting financial risks onto future generations. He calls for smarter taxation strategies that target large, often untaxed inheritances and unrealized capital gains, rather than adding to the deficit through unfunded tax cuts.

Implications for Business, Consumers, and Policy

For businesses, especially in the financial sector, rising national debt poses both opportunities and risks. Higher debt servicing costs can drive up interest rates over time, potentially cooling consumer spending and business investment. On the flip side, tax cuts — particularly those benefiting high-income earners — might offer short-term boosts to spending or investment, though unevenly distributed across sectors.

Consumers stand at the crossroads of benefit and burden. While middle-class families may welcome expanded tax credits or reduced taxes on overtime pay, they could eventually face cutbacks in critical safety nets like Medicaid or SNAP. Furthermore, if rising debt forces future tax hikes or spending cuts, today’s gains may lead to tomorrow’s hardships, particularly for younger generations not positioned to inherit wealth.

From a policy perspective, the bill underscores deep divisions in fiscal priorities. It reflects a broader pattern of bipartisan avoidance of tough choices — notably, whether to raise taxes or cut spending in meaningful, balanced ways. Policymakers may soon find themselves forced into reforms, as unchecked debt and an aging population put escalating pressure on entitlement programs and federal finances.

What We Think

The national debt debate is no longer a theoretical concern — it’s becoming a present-day constraint on the country’s economic flexibility. “We’re basically cosigning a subprime mortgage for our grandchildren,” as Galloway sharply puts it. His criticism rightly highlights that neither political party has shown consistent fiscal discipline, despite the long-term stakes.

Ignoring the rising cost of debt servicing risks eroding America’s ability to fund social safety nets, invest in infrastructure, or respond to future crises. The bill’s mix of unfunded tax cuts and program reductions tilts the balance toward short-term political gains at the expense of long-term stability. While tax relief can be a powerful tool, targeting it effectively — particularly by closing loopholes on dynastic wealth and unrealized capital gains — offers a smarter path forward.

We believe the public debate needs to shift from partisan blaming to pragmatic solutions: both revenue increases and targeted spending cuts must be on the table. Without this, the U.S. risks locking itself into a future where fiscal choices are no longer driven by vision but by the sheer burden of past decisions.