This Week’s Blog Is Written By Scott D. Heins, CFP®, IAG Chief Investment Officer
September 2, 2026

Roll the Odometer

One of the distinct memories of my childhood is going for a special family ride in our 1970s olive green Plymouth Scamp.

My dad had been eagerly anticipating the day his Scamp would cross over the 100,000-mile mark, so he gathered the family for this milestone journey, pulled over when the odometer rolled, and took a picture to preserve this historical moment.

The strange part is the odometer rolled to 00,000. Apparently, Plymouth did not have much faith in their product surviving to this mileage as they only included five digits before the decimal place.

Thus, rolling the odometer to 00,000 was a particular cause for celebration.

On August 18, our country celebrated its own odometer roll with a few more 0s. Our total federal debt rolled over $40,000,000,000,000 on that fateful day, and we have proceeded to add another $100,000,000,000 since then. We are on a roll!

The downside of this odometer roll is that the interest on this debt costs significantly more than repairing an aging Scamp.

The Congressional Budget Office (CBO) estimates that just the interest on our debt will cost taxpayers about $1,039,000,000,000 this fiscal year. That is enough zeroes to tally a $3,000 per person interest liability per year for every person living in our country.

The cumulative current benefit of that annual trillion-dollar interest bill is absolutely nothing. It simply pays the interest on debt incurred for government services and benefits because they were not paid for by tax revenue in the past.

The economic impact of such a debt burden can be gauged by what percent of our collective economic output we dedicate to debt service.

In 2006, interest on the federal debt was 1.7% of our economic output. In 2026, it is expected to rise to 3.3%. By 2036, CBO projects it will rise to 4.6% — a level that many economists believe could create significant challenges unless our economy is growing rapidly.

So who is to blame for this trajectory? Economists with different political views purposely provide us with different answers that appeal to the echo chambers into which many people have self-segregated themselves.

The top-line facts are pretty straightforward. As a percentage of our economy, tax revenue fell from 18.4% of our collective economic output to 17.5% over the last 20 years. We currently live in an era of relatively low federal income taxes, particularly for those taxpayers in the lower federal income tax brackets.

Over the same time period, federal spending increased from 20.3% of our collective economic output to 23.3%. We currently live in an era of rising government spending, much of it driven by demographics.

Thus, from the highest economic perspective, the growing deficit that is driving the debt higher has been fueled by both tax cuts (+/-25% of the increase) and increased spending (+/-75% of the increase) over the last 20 years. This convenient combination permits both political parties to blame each other and be right. The strange reality is both parties would likely prefer to be 100% responsible for this mess rather than 0% responsible.

The current political motivation for addressing this gradually growing problem can be rounded off to zero in my highly subjective opinion. The economic pain of debt costs and higher interest rates are just not significant enough to motivate voters to demand bipartisan solutions just yet.

The good news is that this is a known issue for the financial markets. While it could certainly present headwinds and create short-term volatility, the government’s dismal financial stewardship will not be a surprise that catches the markets off guard. It also presents forward-thinking individuals the opportunity to take advantage of relatively low tax rates and higher interest rates within their financial plans and their portfolios.

Hopefully, this odometer roll story ends better than both the Plymouth Scamp which, unfortunately, caught fire a few years after its milestone was reached, or Rome (see our quote of the week).

Quote of the week: Cicero: “The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt.”

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IAG Wealth Partners, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial. Jason Ganiere is solely an investment advisor representative of IAG Wealth Partners LLC, and not affiliated with LPL Financial.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. No strategy assures success or protects against loss. Investing involves risk including loss of principle.

ART: 1168693
Photo Credit: iStock 140256547