Part 17/19:
McDonald underscores the dangerous cycle of rising interest costs—over $1 trillion annually for debt servicing—and the risk of a debt spiral if deficits continue. The suspension of the debt ceiling only postpones the crisis, which could intensify around August when Treasury borrowing skyrockets, and the government must confront the reality of unsustainable debt levels.
He also notes the stark demographic shift as baby boomers age, with trillions of dollars in passive index funds leading to distorted market valuations. The overconcentration in technology and growth stocks risks a sharp correction when interest rates normalize.