The 26 Percent Solution to Avoid a Sovereign Debt Crisis

Nations do not collapse overnight. They erode gradually, almost imperceptibly, until one day confidence breaks, and with it, stability. History teaches us that fiscal crises are not born of ideology but of arithmetic and denial. The United States is approaching such a moment. With federal spending exceeding revenues by roughly 26 percent, the math is unambiguous. Unless the federal government bends to the wishes of woke leftists and implements historic increases in wealth confiscation, an across-the-board spending reduction of similar magnitude is required to balance the budget. If we continue to avoid this reality, we risk a crisis of confidence in the U.S. dollar that could resemble, and ultimately surpass, the sovereign debt crisis that engulfed Greece in the 2000s.

Why Politicians Don’t Care

Today, the federal government spends roughly $7 trillion annually while collecting about $5.2 trillion in revenue. The difference of nearly $1.8 trillion is no longer the result of the supposedly “temporary” Covid emergency. It is now structural. These deficits persist during economic expansions, not just recessions, and they are financed almost entirely through borrowing, primarily from the Federal Reserve itself, mutual funds and foreign investors. As the national debt grows, so do interest payments, which now rival or exceed major discretionary programs like defense and Medicaid. This creates a self-reinforcing cycle: borrowing leads to interest, interest leads to more borrowing, until the solvency of the federal government sinks into an economic death spiral.

Woke leftists are hoping to destroy the country, so their motivations for economic collapse are obvious. However, weak-kneed Republicans defend the status quo while offering the discredited argument that the United States can carry this burden indefinitely because the dollar is the world’s reserve currency. That confidence is dangerously complacent. The dollar’s dominance is not guaranteed by divine right; it rests on the global belief that the United States will manage its finances responsibly. Reserve currency status is sustained by credibility. Lose that, and privilege evaporates quickly. It is important to remember that besides our own fiscal recklessness, our adversaries, including the BRICS nations, continue to work aggressively to establish an alternative world currency.

The Greek Tragedy

Greece offers a sobering warning. In the early 2000s, Greece enjoyed cheap credit and market confidence after joining the Eurozone. Low borrowing costs masked chronic overspending, generous entitlement promises, and a political unwillingness to align expenditures with revenue. For years, warnings were dismissed as alarmist. Then markets noticed. Borrowing costs exploded, credit vanished, and Greece was forced into severe austerity under external supervision. Pensions were cut, unemployment soared, savings were confiscated from banks, and national sovereignty was compromised. The painful irony is that far harsher cuts were imposed precisely because earlier, more measured fiscal discipline was avoided.

America is not Greece, but that comparison should alarm rather than comfort us. The U.S. economy is vastly larger, and unlike Greece, the United States issues debt in its own currency. But that also means the consequences of mismanagement are potentially far worse. A loss of confidence in the dollar would ripple through global markets, dramatically raising interest rates, weakening purchasing power, inflating asset bubbles, and devesating households at home. Inflation, currency depreciation, and capital flight are not theoretical risks. In fact, they are historical responses to fiscal irresponsibility.

Smoke and Mirrors Money Creation

Exacerbating this danger is the increasingly routine use of money creation to paper over deficits. When government spending is financed not through taxation or restraint in spending, but instead through printing more money, whether directly or via the central bank, the purchasing power of the dollar is quietly eroded. This is inflation in its most insidious form. It’s a hidden tax that requires no vote and leaves no receipt. Official inflation statistics, focused narrowly on consumer price indices, often understate this erosion by excluding asset inflation and the rising costs of essentials like housing, healthcare, and education. When the dollar is measured against long-term purchasing power or stable stores of value, the real rate of inflation, accounting for monetary destruction, has frequently exceeded reported CPI figures by a wide margin. Savers are penalized, wages lag, and wealth is silently transferred from households to debtors, most notably the federal government itself. Over time, this erosion corrodes trust in the currency and accelerates the very confidence crisis policymakers claim to fear.

Every time the government prints money, the money you hold is worth less. This is why gold rose by an unprecedented 63.7% in 2025. Investors recognize that they are far better off owning tangible stores of value instead of dollars. It’s a dangerous trend.

The 26 Percent Solution

Calls for across-the-board spending cuts are often dismissed as politically impossible or morally reckless. But arithmetic is not partisan, and reality does not negotiate. A uniform 26 percent reduction is not a policy preference; it is a harsh reality check that serves to remind us of how far spending has drifted from revenue. Across-the-board spending cuts don’t discriminate as the loss of services and benefits are spread evenly. Targeted cuts inevitably devolve into political trench warfare, with every lobbyist arguing their programs are essential. Shared sacrifice, while painful, is at least honest.

There is also a moral dimension rarely discussed. Persistent deficits shift today’s costs onto future generations, who had no say in these careless spending decisions. In essence, by borrowing to maintain our lifestyle, we give our successors the gift of deferred negligence. Greece learned this lesson the hard way, as younger generations bore the consequences of decades of denial. America risks repeating the same mistake under a different banner.

A 26 percent reduction should be paired with structural reform, including entitlements reimagined for long-term solvency, defense commitments reassessed to match economic reality, waste and duplication eliminated, (you know, like Elon tried to do) and government operations modernized. Reform without real spending cuts, which is the bill of goods we’ve been sold for decades, is cosmetic. Markets respond to outcomes, not intentions or rhetoric.

Delay is really not an option. This looming crisis is real. As debt grows, markets will continually demand higher yields to compensate for fiscal indiscipline. Rising interest costs will crowd out essential services, narrowing choices and accelerating decline. At that point, austerity will no longer be a choice but a mandate imposed by creditors and inflation alike.

The lesson of Greece is not that austerity is desirable. It is that denial makes austerity inevitable and far more destructive. America still has the option to act deliberately, on its own terms, while confidence remains intact. Balancing the budget through meaningful spending restraint is not about shrinking government for ideology’s sake. It is about preserving credibility, protecting the dollar, and maintaining sovereignty over our economic future.

All that said, everyone reading this, including me, will pause and think to themselves that there isn’t a snowball’s chance in hell that Congress will cut government spending by even one percent, let alone 26 percent, which provides the strongest no-brainer financial decision in history: Buy gold and lots of it.

Storm clouds are gathering. Be prepared.