by Chris Saxman

Q – Is Virginia ready for a recession?

Let’s look at some macro level stuff first.

US government debt at 9am this morning:

About 1/3 of which is maturing soon:

That’s $10trn of US government debt, right?

That will be refinanced at HIGHER rates.

Add in $2trn more from this year’s deficit. That’s $12trn.

Plus another $2trn in corporate debt. That’s $14trn.

$14trn this year.

Torsten Slok at Apollo:

The bottom line is that the growing supply of investment grade fixed income product is putting upward pressure on rates and credit spreads.

So higher borrowing rates likely.

And then…

The ol’ Hormuz hose crimp

So how is Virginia prepped for a possible recession later this year?

Many believe that Virginia already would be in a recession were it not for the growth of Data Centers.

Well… here’s the good news albeit from last year:

CNBC Top States for Business Ranking 2025

Structurally, Virginia is sound – according to CNBC.

Too reliant on the federal government, in my honest opinion.

We are who we are.

Recently Weldon Cooper Center at UVA estimated we will lose over 10,000 jobs in 2026.

Cardinal News: Northern Virginia and Hampton Roads have lost more jobs than any other metro area with more than 1 million people Two new economic reports paint a pessimistic picture for the Virginia economy, particularly its two biggest regional economies. They matter to rural Virginia because that’s where much of our school funding comes from.

One of our top areas of performance is in Infrastructure.

Virginia #2

But here is where the CNBC ranking gets a little partisan: Quality of Life.

CNBC Quality of Life Ranking Bottom Ten

From their website on methodology:

Which states people are moving to:

Enter a long drawn-out budget battle now delayed for the gerrymandering ballot question.

Sources in the negotiations of ending the Data Center exemption to fill the $2Billion funding gap between the House/Governor and the Senate tell me there is no end in sight.

There are literally dozens of Data Center business models in play that have been built on the Sales and Use Tax exemption lasting until 2035.

The question being begged here is this:

Is anyone paying attention to the Big Picture?

Doesn’t seem that way.

Chris Saxman is executive director of Virginia FREE. This commentary is excerpted with permission from his Substack account, The Intersection.