Steve Bannon and Kane, editor of Citizen Free Press, warn that the U.S. national debt, now at $37 trillion, is spiraling toward catastrophe. Interest payments are projected to hit $1.1 trillion annually, outpacing defense spending. Foreign bond markets could dictate U.S. policy without urgent fiscal reform, risking economic collapse. They demand structural changes, including spending cuts and revenue increases, to avert a bond market revolt.

Resources for this report:

The White House Office of Management and Budget Releases the President’s Fiscal Year 2026 Skinny Budget

On May 3, 2025, Steve Bannon and Kane, editor of Citizen Free Press, delivered a stark warning about America’s ballooning national debt during a fiery discussion. With President Donald Trump in office, they dissected the federal budget proposed by Russ Vought, emphasizing its failure to address the deficit crisis. The national debt, now at $37 trillion, is a ticking time bomb. "We’re adding a trillion dollars every hundred days,” Bannon declared, highlighting the uncontrolled spending driving inflation and wealth concentration.

Kane, whose fiscal obsession began as a 1987 CNN intern when the debt hit $2 trillion, focused on the crippling interest payments. "This fiscal year, we’re at $582 billion in interest, halfway through,” he said. He projected annual interest costs at $1.1 trillion, surpassing the $1.01 trillion defense budget. "It’s the single largest non-discretionary item in the budget,” Kane warned, noting that 20% of federal revenues—$5.1 trillion against $7.5 trillion in spending—goes to servicing debt. By 2029, with the debt potentially reaching $50 trillion, interest could climb to $1.6 trillion. "That’s the breaking point,” Kane stressed.

The duo criticized past administrations for reckless financing. Bannon slammed the Biden era’s reliance on short-term treasuries as "banana republic tactics.” "They couldn’t sell tens and 30s because they’d have to pay too much,” he said, comparing it to "financing your house on an expensive credit card.” Kane agreed, noting Biden and Obama refinanced at low rates—1% on six-month and one-year bills—ignoring future rate hikes. Now, with rates at 3.24%, the cost of refinancing is crushing. "Scott Bessent’s got to deal with this massive refinancing,” Kane said, referring to the Treasury’s burden.

Foreign bondholders, particularly Japan and China, each owning $1 trillion in U.S. treasuries, pose a growing threat. Bannon recounted Japan’s warning: "We own a trillion dollars of this crap, and you’re going to want us to buy more.” Kane highlighted recent bond market volatility, noting a jump in 10-year treasury yields from 3.8% to 4.5% overnight three weeks ago. "Foreign traders and banks can say, ‘We’re not showing up to treasury auctions,’” he warned, citing the risk of demanded higher yields. Bannon tied this to trade leverage, noting Japan’s resistance to U.S. tariff demands due to America’s debt dependency.

Both demanded action. Kane called for structural reforms, including entitlement adjustments over decades and revenue increases. "You can’t cut $2.4 trillion in four years without raising revenue,” he said. Bannon rejected modern monetary theory, arguing deficits fuel oligarchic wealth. "This is how inflation is embedded,” he said, criticizing Capitol Hill’s inaction and MSNBC’s ignorance. "They don’t do the math,” Kane added, slamming media focus on feelings over fiscal reality.

The bond market looms as the ultimate arbiter. Kane warned of potential credit downgrades by Moody’s, S&P, and Fitch as debt climbs to $43 trillion by 2026. "Wall Street and bond market vigilantes will demand it,” he said. Bannon invoked the 2022 ousting of UK’s Liz Truss by bond markets, warning, "The global capital markets are going to be making decisions for American citizens.” If the dollar loses reserve currency status, "the gravy train ends,” he said.

Bannon and Kane urged President Trump to prioritize fiscal discipline. "We must get our own house in order,” Bannon insisted, warning of a future where foreign markets control U.S. sovereignty. Kane’s final plea: "We’re finally getting close to that choking point.” Without bold action, America faces a fiscal reckoning.

For more context, watch Saturday’s WarRoom featuring “Kane”: