In this week’s The Glass Half Full, Carson Group’s Ryan Detrick, Chief Market Strategist, and Sonu Varghese, Chief Macro Strategist, dig into the eye-popping headline that the U.S. just crossed $40 trillion in debt, up from $20 trillion just nine years ago. Sonu breaks down why the raw number is misleading: Roughly $8 trillion is owed by the government to itself (Social Security, etc.) and another $4.5 trillion is held by the Fed, bringing the real figure closer to $27.5 trillion—still large, but not the doomsday number headlines suggest.
They walk through last week’s 30-year Treasury auction, where the government paid 5.22%, the highest rate in 25 years, as evidence that “the piper” is already getting paid through higher borrowing costs rather than a dramatic default. Ryan applies denominator blindness to the debate, noting household net worth has grown from $101 trillion to $183 trillion over the same nine-year stretch, while the S&P 500 is up 155% and home prices roughly 50-55% since 2019. Sonu flags the real concern: The deficit is still running about 6% of GDP five years into an economic expansion, a level historically seen only during recessions, compounded by new competition from AI infrastructure spending for capital in the credit markets.
They close with some perspective on presidential debt additions across administrations, a wild visual comparing $1,000 bills stacked to $40 trillion (400 miles high, 72 times Mount Everest), and their base case: inflation and higher-for-longer yields are how the debt gets paid down in real terms, and this fits their broader inflationary growth outlook where stocks and commodities can still do well.
Key Takeaways
- The headline $40 trillion figure overstates the real burden: About $8 trillion is intragovernmental debt (Social Security trust funds, etc.) and $4.5 trillion is held by the Fed, leaving roughly $27.5 trillion held by the public.
- Last week’s 30-year Treasury auction priced at 5.22%, the highest yield in 25 years, showing that rising borrowing costs, not default risk, are how the market is already pricing in debt concerns.
- Household net worth has nearly doubled from $101 trillion to $183 trillion over the same nine years debt doubled from $20 trillion to $40 trillion, with the S&P 500 up 155% and home prices up roughly 50-55% since 2019.
- The bigger worry isn’t the debt level itself but the deficit, running near 6% of GDP five years into an expansion (typically a recession-only occurrence), now compounded by AI infrastructure spending competing for the same credit markets.
Jump to:
0:12 — The $40 Trillion Debt Milestone
1:08 — Breaking Down Who Holds the Debt
3:02 — Bond Auctions and the Rising Price
4:45 — Denominator Blindness and Leverage Risk
6:38 — Deficits, Entitlements, and AI Competition
10:18 — Politics, A 400-Mile Debt Stack
12:14 — Inflationary Growth Outlook and Wrap
Connect with Ryan:
- LinkedIn: Ryan Detrick
- X: @ryandetrick
Connect with Sonu:
- LinkedIn: Sonu Varghese
- X: @sonusvarghese
The views stated in this podcast are not necessarily the opinion of Cetera Wealth Services, LLC, or CWM, LLC. and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
Ryan Detrick and Sonu Varghese are non-registered associates of Cetera Wealth Services LLC.
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