I'm Danny Moses and this is the Danny Moses Show. In this episode, why should you care about the United States national debt? I'll tell you. And my fellow SeaCrest partners, Porter Collins and Vincent Daniel, join the show to talk about the past, the present, and what lies ahead for the markets. Plus, I'll give you ways to trade some of the topics I'm discussing in the form of Kalshi event contracts.
Over 30 years of beating Wall Street, predicting the famous Big Short — now he's here for you. This is the Danny Moses Show.
Welcome to the inaugural episode of the Danny Moses Show. Every week we will talk about and help make sense of the most important and impactful events happening in the markets. And I will do my best to break it down for you in a way that both informs and entertains. That's what you can expect here on Scripps News. Let's start with what's on my mind and why it matters.
The US national debt is approaching $39 trillion. That's up from around $9 trillion where it was in 2007 just before the Great Financial Crisis. With unprecedented stimulus and spending from the Federal Reserve and US Treasury over the last 18 years, which includes the pandemic, we find ourselves in uncharted territory. While there is no doubt that both the financial crisis and pandemic required the government to step in and provide financial support, we have yet to get our house in order and we continue to run annual deficits of just under $2 trillion.
The problem here is that it is very difficult to balance the books of the United States for the following reasons. We spent roughly $7 trillion in our last fiscal year, which ended in September 2025, and the majority of that spend is mandatory. It includes the interest we pay on our debt, which was over $1 trillion last year alone. This is why you hear so much about the need to cut rates and keep our bond yields low to try and minimize this expense. The other large pockets of expenses come from Social Security at around $1.6 trillion, Medicare around $1 trillion, and defense spending of over $800 billion, which will be difficult to cut as well.
Let's get back to the overall debt picture. There are certain mechanisms in place that are supposed to act as a guardrail to keep things in check, such as the debt ceiling, but that has been used as a political pawn by both parties over the last several years. Not raising it would mean a drastic cut to government spending, coupled with higher taxes to help balance our budget. To put the debt ceiling in perspective, it currently sits at just over $41 trillion, which was raised from just over $36 trillion in July of 2025. That's after having been suspended in June of 2023. Here's the thing to focus on: based on current government deficit trends, we will need to adjust the debt ceiling higher once again at some point in 2027.
We are also dependent on other countries such as Japan, China, and the UK to continue holding and buying our debt. Over $9 trillion of our debt is held by foreign countries, and Japan alone owns around $1.2 trillion of our treasuries, and they have their own issues to address. That is something to think about as foreign policy can have a direct impact on our finances at home. We need to give the world an excuse to keep buying our paper. But what does all this mean for you? Are your Social Security and Medicare benefits at risk? This is one of the reasons you should care. While there is hope we can grow our GDP and economy enough to reduce our deficit, there are no quick fixes. And by cutting rates to try to both lower our interest payments and stimulate the economy, we risk increasing inflation and our cost of living.
So that's the picture right now. Growing debt — we need other countries to help fund it. Mandatory spending is mandatory. And there's one more technicality here I want you to focus on. The rating agencies — yes, the same ones that were late to recognize the subprime crisis — S&P, Moody's, and Fitch have already downgraded the United States' AAA rating, with Moody's being the last to lower the rating to Aa1 in May of 2025. They cited escalating debt and spending concerns as reasons for the downgrade.
Moody's did provide a stable outlook, partly predicated on the ability for the Federal Reserve to maintain its independence and the US dollar's role as a global reserve currency. Along with the debt ceiling, these agencies provide another guardrail, or report card if you will, in monitoring and detailing our financial health. While investors can choose to ignore these downgrades as simply symbolic because the US and the US dollar are still the driving forces in the global economy, we are beginning to see moves in certain assets that bear watching. From the strength in gold to the weakness we are seeing in the US dollar, the markets are trying to tell us something. All right, the table is set for the conversation ahead, and it will be a good one. Porter Collins and Vincent Daniel, my boys from The Big Short, are next.
The Danny Moses Show is sponsored by Kalshi.
Welcome back. This is the Danny Moses Show, where we simplify what's driving our economy and markets. I am thrilled to have my former partners from The Big Short, Porter Collins and Vincent Daniel, join me. Guys, thanks for coming on the show, and I couldn't think of better guests to have on the inaugural episode. And as a way of background, I met Vinnie in the late '90s when we both worked at the brokerage firm Oppenheimer, where I was a salesman and Vinnie was an analyst working for Steve Eisman, who was portrayed by Steve Carell in The Big Short, by the way. And I met Porter when he was working for Steve at a hedge fund in the early 2000s. Steve then brought us all together, and the rest is history. Vinnie, I want to start with you. Your road to Wall Street started as a kid from Queens, and I also thought Jeremy Strong portrayed you accurately in the movie. When did you realize you had such a passion for the markets and wanted to make it a career?
Well, first off, Danny, thanks for having us. This is fantastic, and we're so proud of you that you're doing this. This is incredible, and it'll be great for all the people that listen to you. It's going to be awesome. Just in terms of me, where my passion came from — there was a great scene in Ozark, where, if you know the show Ozark, Ruth Langmore meets up with the rapper Killer Mike in a diner, right? And she's about to — I forget — she's about to, or was going to, whack the guys who killed her cousin, and she was listening to a rapper called Nas, who came from Queens. And they talked about Manhattan and looking at Manhattan across the river and what you saw. So, as a kid growing up in Queens, you always knew there was something different over the river in Manhattan. That's where the money was, and that's where the excitement was for me. It really came from my mother, right, who worked at a commodities brokerage firm. She was an accounts payable clerk. And I remember going to a corporate picnic, and the people there were just different than what I was used to. They weren't like the people that came to my holiday parties or my New Year's Eve parties. They were just different, and it got me excited from day one that that's where I needed to go to. And that's really where it came from for me.
That's amazing. The only thing that I would note there is, just because there is a big bidding war between Netflix and Warner Brothers, is that I believe Ozark was on Netflix, not HBO. So when they claim that property, that might come up in the merger. So Vinnie, thanks for that. All right, Porter, on to you here. A little bit different upbringing — you were training to be a two-time Olympic rower while Vinnie was playing handball in Queens. What turned you onto the markets, and what still drives you, I guess, today?
Well, Danny, great to be here. You know, as you pointed out, I was an Olympic rower, and, unlike the NIL money of football these days, there is no money in rowing. And so I knew I had to channel my competitive spirits somewhere else, and look no further than the capital markets and stock market. And to this day, you know, I still love the challenge and love the competitive nature of markets. And I hope to be doing this into my late 90s. So that's the game plan.
All right. I talked in the first segment about our growing national debt. President Trump was asked in Davos this week about that. I want to play a little clip of what he said.
The US debt is high and is now the biggest expenditure on your budget. How do you get out of that?
Well, the big thing is growth. I mean, growth is the way. If we grow like this, we go from having — at 36, 37 trillion — we go from having high debt to low debt, but we also are cutting expenses, you know, the old-fashioned way. We have extraordinary growth. I think we're going to be growing our way out, but I think we're going to be paying off debt. We're taking in tremendous money from tariffs, fairly. And again, I'm using them judiciously. You know, Switzerland's a case study. I could have gotten much more, I could have asked for much more, but we're using them judiciously. But I think growth, most importantly, and then cutting cost.
Okay. My reaction to that is the debt's not 36 or 37, but what's a trillion here or there? It's approaching 39 trillion. Yes, we can stimulate growth, but I don't think we're going to be cutting much of the $1.8 trillion deficit which I mentioned which occurred last year. And so some of these policies, yes, can help, but when you're cutting taxes and so forth, I just don't see how this is going to happen. So guys, Vinnie, I'll start with you. How do we manage this, and is it ever going to matter?
Well, the way I think about it is we are managing it, but we are managing it in a way that most people don't see, right, Danny? And what we're doing is debasing the currency. And in many respects, as the debt grows, we always ask ourselves the question: who in the world is going to buy this debt at the prices we need in order for us to continue to thrive? And whether we find real tangible buyers — let's say insurance companies or savers — or we don't, we're going to get it done by hook or by crook. And the way we're going to get it done is by either printing money, and they'll use some fancy terms like quantitative easing or a bunch of acronyms to explain what we're doing, or allow people, which we are doing, to lever themselves and buy treasuries on a small spread. Either way, the way we look at it, to keep it simple, is that they will continue to debase the currency so that we can continue to enjoy this fiscal largesse, and we'll probably get into that discussion in a bit. But all roads to us lead to gold as a result of what we're seeing.
You stole my thunder for Porter, which I'm sure he's going to mention. So Porter, why don't you weigh in on the national debt and what we can do about it, if anything?
Well, Trump is right in the fact that we need to grow ourselves out of it. Where he's wrong is that we're not going to pay off debt, right? I think in 2023 we wrote our annual letter about how the national debt is going to approach 40 trillion in a couple of years, and lo and behold, a couple of years later, here we are, right? And so that pace is not slowing down, and just the aggregate, sheer size of the debt growing is a problem. And I think that whether that debt is going to be 40, 50, 60 trillion, it's not going to go down, and obviously the interest costs just compound upon that. So that's the way I see it. And listen, I want us to grow out of it, but we're going to need a lot more growth to really debase the debt out.
All right. Other topics out there that are moving markets: Federal Reserve independence and tariffs. So the Supreme Court is going to have a hand in both of those topics. It heard the Lisa Cook firing case; the justices seem prepared to protect her, and it'll decide whether these tariffs from the president are constitutional. So question for you, Vinnie: I know how we both feel about the Fed, how they handled the GFC, all the quantitative easing that needed to take place. I guess, what do you think about the independence of the Fed, and how important is it to the markets?
