U.S. Debt Grows 106%, Housing Costs Surge, and AI Capex May Drag on GDP

Key Takeaways

• U.S. Treasury debt climbed 106% over the past decade to $40 trillion, with no political will to curb deficits.
• Mortgage payments are up 160% since 2015; gasoline prices hit $4.10, the highest for August.
• AI capital expenditure is boosting imports and may weigh on GDP growth, while gold hit a 3-month high on fiscal concerns.
• Long-term U.S. equity returns are spectacular, but investors spend about 80% of time below prior peak wealth.
• Small businesses generate 43.5% of GDP and 61% of net new jobs since 1995, underscoring their economic importance.

1. Fiscal Policy and Debt Concerns

1. U.S. national debt rose from $19 trillion to $40 trillion in a decade, a 106% increase, and analysts see no political will to cut deficits, so debt is likely to keep climbing. — via 1 2
2. The reported plan to use Treasury General Account (TGA) funds for long-term bond buybacks is disputed: Lyn Alden clarified the TGA balance is about $950 billion, not entirely earmarked for buybacks, and media coverage is overstated; Liz Ann Sonders argues the move reignites fiscal and dollar-credibility fears, pushing gold to a 3-month high as the “debasement trade” returns. (disputed) — via 1 2
3. Clifford Asness criticized “New MMT” logic, arguing that treating debt default to the central bank and money-printing as zero-cost, while blaming inflation on war and supply chains, is hard to sustain. — via 1

2. Housing Costs and Inflation

1. Compared with a decade ago, the 30-year mortgage rate rose from 3.4% to 6.7%, the median U.S. home price increased from $243,000 to $434,000, the down payment rose by about $38,000, and monthly mortgage payments climbed from $862 to $2,240, a 160% increase. — via 1
2. U.S. gasoline prices rebounded to $4.10 per gallon, the highest for this time of year since August records, signaling that inflation is far from over. — via 1

3. AI and Tech Investment

1. The AI capital expenditure boom may not be a tailwind for GDP growth: large corporate spending is lifting imports, particularly Asian chip manufacturing, while U.S. export gains are limited, making net exports a drag on GDP despite the investment boom. — via 1
2. @jason speculated (unverified) that Hugging Face is for sale and that AWS or SpaceXAI should acquire it; he also claimed Nvidia is committing $6 billion to open source, with Jensen Huang betting on full-stack AI. — via 1 (unverified)
3. Reid Hoffman highlighted the Thesis Statements project, which gathers 100 builders and thinkers to make concrete predictions about the forms of great human work after AI automation. — via 1

4. Market Long-Term Returns and Small Business

1. Meb Faber showed that $1 invested in U.S. stocks in 1800 would have grown to $4.22 million by 2025 in real terms, versus just $898 for bonds; global stocks have never had a nominal loss over any 20-year period in the past 225 years. The best-performing U.S. stock, Altria, delivered a total return of 265.5 million times. Timing matters: saving $5,000 annually from age 20 to 26 and stopping would yield over $1 million by 70, while starting at 40 would require $270,000. Only 6 of the 100 best U.S. stocks have averaged more than 20% annual returns, and investors spend about 80% of their time below prior peak wealth. — via 1
2. Meb Faber noted that EYLD, on its 10th anniversary, ranked in the top 5% of Morningstar emerging markets funds by 10-year total return (out of 540 funds, as of July 31, 2026). — via 1
3. Small businesses account for 99.9% of all U.S. firms, employ 45.9% of the private-sector workforce, contribute 43.5% of GDP, and have created 61% of net new jobs since 1995, making them an important channel for economic mobility. — via 1