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Let me say first that I am not a lawyer. Nor am I a supporter of Donald Trump for the GOP presidential nomination. Yet, I am troubled by the New York Executive Law § 63(12) (the “Law”) under which Donald Trump and his associates have been found to have committed fraud, his business licenses cancelled and various of his business units ordered dissolved within 10 days – all before a trial in which New York State seeks a whopping $250 million from The Donald.

This Law strikes me as dangerous, certainly to anyone doing business in New York State. As the order by New York Supreme Court Justice Arthur Engoron (“the Order”) acknowledges, no victim of Trump’s activities “lodged a complaint” or “otherwise claimed damages.” Usually, a murder conviction requires that the victim’s body be found. In the Trump case, the body is alive and kicking.

Casey Jones might as well be at the throttle. Certainly, there’s nothing slow-motion about Uncle Sam’s financial train wreck. The crisis is broadly consequential. In the eleven months through August, net interest on the national debt has hit $630 billion, with $69 billion paid last month. It will end the full year at double the $351 billion paid just two years ago in fiscal 2021.

The increase is stunning, but predictable. So too is next year’s increase. With the Federal Reserve keeping rates “higher for longer,” net interest will hit almost $850 billion next year and top $1 trillion in fiscal 2025, if the current interest rate environment persists.

The environment may not persist, since debt throughout the economy is repricing at interest rates that are multiples higher than those prevailing in the easy-money decade of the 2010s. Businesses and consumers may buckle under the burden. That would bring recession and lower rates, despite current economic commentary to the contrary that sees, instead, a “soft landing” ahead.

The skyrocketing rise in interest costs has some of the fascination of a runaway freight train, transfixing observers. Yet, we should ignore the spectacle to focus instead upon the damage being wrought

After the downgrade of America’s debt by Fitch Ratings, a drumbeat of negative assessments has followed in respect of how deep in the hole our country has plunged. That’s a good thing, since net interest on the debt is escalating rapidly on a track to hit an unsustainable and crippling $1 trillion in fiscal 2025. 

This fiscal year net interest is headed toward $700 billion, having already hit $561 billion in ten months, with $67 billion paid in July. Interest rates are at the highest levels in decades and likely to stay there, with the Federal Reserve saying it will hold rates “higher for longer.” Rates may climb further, as they have in recent days.

Most economic forecasters now see uninterrupted economic growth rather than a recession that might bring rates down. Monetary experts are considering whether current rates are a new normal and whether the neutral rate of interest and the real rate of return may be higher than previously thought. 

The Fiscal Responsibility Act that finally resolved the debt ceiling standoff might have solved a crisis in the short term — but it sets up a momentous challenge for whoever is elected president in 2024. The Act suspends the ceiling until January 2, 2025, at which time the new ceiling becomes whatever is the then-outstanding amount of national debt.

That means we will hit the new ceiling on the very day it is established. And whoever is elected president next year will start his term in the middle of a new debt crisis. Just two years after hitting the “old” ceiling last January, we will be right back into another standoff.

The only upside is that the new law could set the terms of debate in the 2024 presidential and congressional elections. It could force the presidential — and, for that matter, congressional — candidates to address what they will do on Inauguration Day in 2025, when the nation will be 18 days into a new suspension of borrowing.