According to Financial Times journalist Robin Wigglesworth, the United States may already be experiencing a debt crisis, though it is unfolding gradually rather than through an abrupt bond market crash. This warning arrives as US debt servicing expenses reach a historic $1.1 trillion for fiscal 2026. Rather than triggering a default, the national debt crisis is currently draining the federal budget through an increasingly tight, slow-moving squeeze.
Also Read: Trump’s Economic Promise in Iowa Runs Into Trouble
US Debt Crisis, Rising Interest Costs And A Slow Economic Squeeze
Wigglesworth, author of *A Fabulous Debt*, shared on The Long View podcast that he feels greater apprehension about the situation than he used to, though he remains less alarmed than most observers.
Robin Wigglesworth had this to say:
“I think the US is maybe in the early stages of what I’d call a chronic debt crisis. It’s just very slow, very gradual.”
Why US Debt Servicing Costs Keep Climbing
This trend is largely driven by refinancing, as Treasury securities originally issued at rates between 1% and 3% are now being rolled over at rates as high as 6%, all while the federal budget remains far from balanced. The Committee for a Responsible Federal Budget (CRFB) calculates that interest payments reached $1.1 trillion in fiscal 2026—representing a record 3.4% of GDP and exceeding spending on either defense or Medicare. This bill serves as the clearest indicator yet of the ongoing debt crisis, and servicing costs continue to rise. Wigglesworth estimates the current figure is actually around 3.5% to 3.6% of GDP.
He also noted:
“And that is not great. And it is definitely going higher, but it still is another decade before it hits kind of 5%-ish.”
A Chronic Crisis, Not An Acute One
Many observers envision the US national debt crisis concluding similarly to situations in Argentina or Greece, involving a default followed by restructuring. Wigglesworth rejects that outcome for the United States.
He stated:
“I don’t think that happens in a country like the United States that can literally print dollars.”
Wigglesworth additionally remarked:
“This debt crisis doesn’t play out in hyperinflation, doesn’t play out in runaway bond yields. It plays out as debt eroding America’s financial health and being able to spend less on other stuff it wants to spend money on.”
Not everyone shares this sense of calm. With the 10-year Treasury yield surpassing 5%, CRFB President Maya MacGuineas issued a more urgent warning:
“A fiscal crisis, once unthinkable, is now a distinct possibility.”
What Venice Teaches About Government Debt
The historical roots of government borrowing run deep. Wigglesworth’s book traces bonds back to 1171, when Venice financed a military fleet through tradable loans yielding 5% annually. Although Venice never paid back the principal, the Rialto market emerged as the world’s inaugural bond market.
Scope Ratings issued a separate warning this month, maintaining the US credit rating at AA- while projecting that debt will approach 160% of GDP within ten years. To date, the ongoing fiscal strain has functioned as a slow grind, leaving Washington with fewer policy tools for the next economic downturn—a factor of significant importance for investors holding bonds, equities, or cryptocurrencies. While the national debt crisis may never manifest as a sudden explosion, Wigglesworth cautions that the long-term impact will nonetheless prove painful.