Midterm Elections: Debt, Deficits, and the Limits of the Ballot Box – Interest Costs, Treasury Supply, and the Discount Rate on Everything Else

September 2026

As the midterm election approaches, investors are focused on which party will control Congress. However, whoever wins will inherit the same fiscal reality: roughly $40 trillion in federal debt, rising interest costs, and a budget largely fixed by existing law. Deficits have widened under both parties, pointing to structural causes rather than political control. For long-term investors, the more durable issues are the path of deficits, Treasury issuance, and the yields required to absorb growing government debt, all of which can affect markets broadly.