The $39 trillion national debt just got its own version of the viral Doomsday essay

America has its viral AI doomsday essay. Now it has a debt version.

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No Labels, the centrist political organization that has spent 16 years pushing bipartisan solutions in Washington, has quietly released Nightmare on Main Street—a fictional “oral history” narrated from the vantage point of 2029, in which a cascade of weak Treasury bond auctions triggers an economic collapse worse than the Great Depression. It’s a deliberately unsettling document, written in the same near-future dystopian frame as the Citrini Research AI essay that briefly tanked software stocks earlier this year. Its authors believe the timing is not a coincidence, although they pointed out to Fortune their piece actually predated Citrini’s, and they haven’t wiped tens of billions of dollars off software stocks.

“There’s a sense that there are all of these threats gathering on the horizon,” Ryan Clancy, No Labels’ chief strategist, told Fortune. “And probably a recognition that our political system does not seem remotely equipped to deal with any of them.”

The report lands as the U.S. gross national debt recently crossed $39 trillion for the first time—a milestone reached less than five months after it hit $38 trillion. Net interest payments have already surpassed $1 trillion in fiscal year 2026, nearly triple the $345 billion paid in 2020, and have eclipsed defense spending for the first time in modern history. The Congressional Budget Office projects the federal deficit will reach $1.9 trillion in fiscal year 2026 and balloon to $3.1 trillion by 2036.

“Neither party has any credibility on the debt or deficit right now,” Clancy said. “We’ve been on a 25-year binge of spending increases and tax cuts, and both of them have signed off on it.”

The match that lights the fire

The fictional scenario in Nightmare on Main Street centers on a collapse that begins not with a government shutdown or debt ceiling standoff—the familiar Washington theatrics—but with something more technical and far more consequential: Treasury bond auctions that start failing. In the report’s telling, by September 2028, investors have collectively stopped wanting to buy American debt at prevailing yields. The fictional Fiscal Assistant Secretary of the Treasury describes the moment: “We had become a bad credit risk—a deadbeat they didn’t trust to pay back a loan.”

It’s a scenario that has already drawn real-world validation. Former Treasury Secretary Hank Paulson warned recently Congress needs a “break glass” emergency plan for exactly this possibility, a recommendation seconded by the nonpartisan watchdog, the Committee for a Responsible Federal Budget. Shortly after the Iran war began, there were several weak Treasury auctions in which bonds cleared at higher-than-expected yields or drew insufficient buyer demand.

“A couple of bad Treasury auctions doesn’t mean we’re in a crisis,” Clancy said. “But when you start to string enough of them together, it suggests we could have a real problem here.”

The reason a debt crisis is fundamentally harder to solve than the 2008 financial crisis, Clancy argued, comes down to a single brutal logic: “In 2008, the problem was the balance sheets of private institutions like banks, and the government was the fireman. What we’re talking about with a debt crisis is the problem is on the balance sheet of the government. So the fireman has the problem.”

73% of the budget isn’t up for debate

One of the report’s most striking data points is how little of federal spending Congress actually controls. Of the $7 trillion the U.S. spent last year, only 27% is discretionary. The remaining 73%—Medicare, Medicaid, Social Security, interest payments, and other mandatory programs—essentially runs on autopilot, growing automatically under existing law regardless of what Congress does.

That means the knock-down, drag-out government shutdown battles that have become a Washington ritual are, in effect, a fight over a little more than a quarter of the federal ledger.

Meanwhile, the go-to political solutions don’t add up. Eliminating waste, fraud, and abuse—a perennial Washington promise—would be “a rounding error,” Clancy said.

“You could take $100 billion of waste, fraud, and abuse out of our annual budget, which would be a massive achievement,” he said. “That’s 5% of last year’s deficit.”

Even aggressive economic growth won’t close the gap: Research from the National Bureau of Economic Research shows the late 1990s surpluses were only about half attributable to growth, and the current fiscal hole is far deeper, a point that Penn Wharton Budget Model director Kent Smetters previously made to Fortune.

The actual goal, Clancy argued, doesn’t need to be a balanced budget—a political and mathematical near-impossibility. It needs to be getting the deficit-to-GDP ratio down to a level where the economy grows at least as fast as the debt. Last year’s deficit-to-GDP was roughly 6%, growing about three times faster than the economy