Core Insights - The U.S. debt crisis is on an unsustainable path, with the timing of its collapse being the biggest unknown factor [1] - The "excess privilege" of borrowing at low costs is diminishing, weakening the dollar's status as a reserve currency [1] - Moody's downgrade of the U.S. sovereign rating has not led to a market downturn, indicating investor acceptance of rapid debt expansion [5] Financial Projections - Interest and mandatory spending will rise from 73% of federal spending in 2024 to 78% by 2035 [8] - The fiscal deficit is projected to increase from 6.4% of GDP to approximately 9% by 2035 [8] - The debt-to-GDP ratio is expected to rise from the current 98% to 134% by 2035 [8] Historical Context - Moody's rationale for the downgrade is based on the assumption that the 2017 tax cuts will continue, leading to significant increases in debt and deficits [5] - Historical trends indicate that the debt-to-GDP ratio could exceed 200% in the coming decades [5][8]