Martha Gimbel, executive director of The Budget Lab at Yale, returns to the New Bazaar to chat with Cardiff about all things debt and deficits. Martha argues that the fiscal choices of the past decade have already led to higher costs on mortgages, car loans, and small-business debt. She and Cardiff discuss what might happen next given the frightening projections for future borrowing. They discuss: Is “we can’t leave this problem to our kids and grandkids” a misleading way to think about the national debt? Why is it so hard to know exactly what level of debt could lead to a fiscal crisis? Why such precision is often the enemy of understanding Does she take flak from the left for arguing that the crowding out effect is a real thing? Immigration and the deficit Which policies could actually bend the deficit curve down? A DOGE post-mortem And lots more. Related links: Lower Immigration Means Lower Productivity Growth by Abhi Gupta 2026 chart book examines spending, taxes, and deficits by Jessica Riedl Martha’s The Atlantic piece on the national debt The National Debt’s Unforgiving Math by Jared Bernstein The Budget Lab at Yale website The Budget and Economic Outlook: 2026 to 2036 | Congressional Budget Office Where Do Our Federal Tax Dollars Go? | Center on Budget and Policy Priorities CRS report on Foreign Holdings of Federal Debt

Debt and Deficits: Time to Worry?

The New Bazaar

# Full Transcript

**Podcast:** The New Bazaar

## Transcript

Hi, I'm Cardiff Garcia and this is The New Bazaar. It is really hard to get normal people to care about the government's deficit or the national debt. For example, ask yourself if the following numbers mean anything at all to you. The total U.S. national debt right now is about $31 trillion. That is the money that the government owes to holders of U.S. Treasuries.

That's now about roughly 100% of U.S. GDP and it has not been that high since right after World War II. And it is projected to keep growing. The amount of interest that the government pays on all that debt as a share of GDP is now more than 3%, double what it was just five years ago. And that too is projected to keep growing. Both numbers are growing because the U.S. runs a deficit every year. It spends more than it receives in taxes.

Those deficits have been huge in recent years. Now, did you care at all about anything I just said? I ask you again. Because you should. A lot. It is already affecting you even if you don't realize it. So says today's guest, my friend Martha Gimbel, the Executive Director of the Yale Budget Lab and a former guest on The New Bazaar. The debt, the deficit, where they're going, and above all, why you should care. All coming up.

Martha Gimbel, welcome back to The New Bazaar. Thank you for having me. You are, in addition to being an economist, a human person as well. Sadly. Not all economists are. Yeah, I mean sometimes. Most of the time. Yeah. I bring it up because you have both a professional reason for analyzing the debt and deficits. You're the head of the Yale Budget Lab, but also a personal one. So you've got an almost two-year-old kid. Yeah. And you also have a minus one-month-old.

You've got a baby in the oven. No, not a baby in the oven. A bun in the oven. Yeah, let's not put the baby in the oven. Don't. We have with us today child murderer Martha Gimbel. Yes. So when people talk about the deficit and the national debt, a lot of times the way they frame it is like, we have to take care of this because we can't leave it to our children and our grandchildren to pay it back. You have kids, young kids. So do you think about it that way?

Is that the right framing or is that kind of a wrong way to think about the deficit and the debt? I don't think about it that way, which may be that I'm like a bad mother or a bad economist. That's what we're driving at here. That's really, yeah, exactly. You know, I have been thinking a lot about recently is that a lot of the times when we talk about debt and deficits, it's this kind of boogeyman in the room of like, you've got

to take care of your debt and deficits or like eventually the fiscal crisis will come and get you. And to be clear, I would prefer that the fiscal crisis not come and get us. That seems very stressful. Right. But I think one of the things that we've been trying to really emphasize at Budget Lab is that this kind of deficit spending...

Debt and Deficits: Time to Worry?

Transcript

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Debt and Deficits: Time to Worry?

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.