The United States national debt crossed $39 trillion for the first time this week, arriving at the grim milestone less than five months after it hit $38 trillion — a pace of accumulation that budget watchdogs are now calling, with unusual unanimity, “unsustainable.” At Fortune‘s CEO Initiative dinner in New York on Wednesday night, one of America’s most respected foreign policy voices put the moment in stark terms: the debt isn’t just a balance sheet problem. It’s a threat to American power itself.
Richard Haass, president emeritus of the Council on Foreign Relations after leading the organization for 20 years, and a senior State Department official under multiple administrations, pointed to his own thought leadership on the subject. Haass and Carolyn Kissane co-authored a paper for the Peter G. Peterson Foundation, warning about the national security implications of the ever-expanding debt. At the time, he told Fortune‘s Eva Roytburg that he felt “a little bit like Paul Revere,” but instead of the British coming, the crisis is coming. “It’s a slow-motion crisis.”
On Wednesday night, Haass told Fortune‘s Diane Brady that the angst over the national debt is massive but distant at the same time. “It’s one of those things that’s almost like the old law: It’s fine until the day it’s not. So I think we’re living on borrowed time.”
He was careful to hedge on timing — “I’m just not smart enough to know whether it’s a month from now, a year from now, five years from now” — but his broader alarm was unambiguous. “I do think we’re eroding confidence in American competence and leadership.”
A Debt Clock That Doesn’t Stop
The numbers behind Haass’ concern are hard to dismiss. The Congressional Budget Office projects the federal deficit will reach $1.9 trillion in fiscal year 2026 and balloon to $3.1 trillion by 2036. Debt held by the public — now at $31.3 trillion — is on a path to hit 120% of GDP within a decade, eclipsing the previous all-time record set just after World War II. The Peterson Foundation projects the debt will cross $40 trillion before this fall’s midterm elections.
Perhaps most striking is what it costs just to carry the load. Net interest payments on the national debt have already exceeded $1 trillion in fiscal year 2026 — nearly triple the $345 billion paid in 2020 — and have surpassed defense spending in the first three months of the fiscal year alone. “Interest is the fastest-growing ‘program’ in the federal budget,” Michael A. Peterson, CEO of the Peter G. Peterson Foundation, previously told Fortune.
At the Fortune CEOi dinner, a CEO in attendance escalated the alarm further, noting that the $39 trillion gross figure masks an even more staggering liability. When unfunded entitlements in Social Security, Medicare, and other long-term obligations are factored in, the true fiscal gap approaches $100 trillion — a figure consistent with analysis from Penn Wharton Budget Model director Kent Smetters, one of America’s foremost fiscal economists. “If you actually nominalize that and put that debt to GDP, it’s 200% over,” the CEO said. “That’s a disaster.”
Smetters has previously estimated that, without major policy changes, U.S. Treasury debt could become unable to roll over its accumulated obligations within roughly 20 years.
Haass’ warning: A national security lens
What sets Haass’ framing apart from standard fiscal hawkery is his insistence that the debt’s most dangerous consequence may not be economic at all — it’s strategic. His concern is the moment when the debt forces the hand of whoever runs the Federal Reserve next. “Some successor to Jay Powell is going to have to raise rates not to cool down an overheated economy, but because a Treasury auction is not going to go the right way,” he warned. At that point, the policy choices available to the United States become far less attractive than they are today.
He was equally pointed about the politics. When this editor, who was in attendance, noted that Fortune‘s readers seem to have an especial concern with the debt story, Haass pushed back — not on the concern, but on whether the obsession has ever translated into meaningful political action.
“People say they’re obsessed with it, and their political behavior in no way reflects concerns about the debt,” he said.
This gap between stated anxiety and electoral behavior, Haass argued, is precisely what has allowed the problem to fester. Haass didn’t note the particular context of the milestone arriving roughly two weeks before the ten-year anniversary of President Trump’s 2016 campaign promise to eliminate the national debt within eight years; instead, the gross debt has roughly doubled from $19.9 trillion since then, including growth under the four years of President Joe Biden.
The Counterargument: Symptom, Not Disease
Not everyone views the $39 trillion number with equal dread. Smetters himself noted that the gross debt figure has limited economic meaning — it includes intragovernmental obligations like the Social Security trust fund, essentially “the left hand of government owing the right hand.” The more meaningful number, debt held by the public, is $31.3 trillion. Still, Smetters told Fortune, “the fact that debt held by the public has now exceeded $31 trillion is not great.”
The deeper critique of the alarmist framing is structural: the United States issues debt in its own currency, and remains the world’s reserve currency issuer. When global investors panic, they still run to Treasuries, not away from them. Japan has run a debt-to-GDP ratio above 200% for years without the bond market collapse its critics have long predicted. Earlier in his interview with Brady, Haass highlighted the prime minister of Japan, Sanae Takaichi, as “one of the two or three most capable leaders in the world right now.” Saying that Japan has been “thinking hard about how it adapts to its changing demography,” he called it a really good example of leadership. The implication is that the United States offers a contrasting negative example.
The relevant question isn’t the size of the debt, but what conditions could finally break investor confidence — and those conditions have as much to do with governance and geopolitical credibility as with any balance sheet figure.
That’s the thread that ties Haass’ national security argument back to fiscal reality. The erosion of institutional expertise in Washington, the retreat from global engagement, the dysfunction that Haass himself catalogued at length on Wednesday night — these, he suggested, may be accelerating the debt’s timeline from manageable problem to genuine crisis. The debt is the symptom. The disease is political dysfunction. And right now, nobody in Washington is seriously treating either.
“At some point,” Haass said, “the chickens come home to roost.”
