If I understand it correctly, this is different, however. In November the Fed was trying to increase rates to bring down inflation. But the high yields now are the result of a lack of private demand.
If that is indeed the case it’s very likely worrying.
https://www.macrotrends.net/2521/30-year-treasury-bond-rate-...
4% on a couple of trillions is vastly different from 4% on 35 trillion.
The metric you want to surveil is how much of the US tax revenue that goes to servicing this debt
The tariff tantrum, destroying US soft power institutions with DOGE, alienating all of our allies with petty feuds, the constant framing of the United States' enviable global positions as bad things. None of these things make any sense if you actually want the United States to succeed.
https://fred.stlouisfed.org/series/GFDEGDQ188S
Here for example, the Congressional Budget Office, forecasted federal debt as a percent of GDP would continue to rise unchecked, back in 2023: https://www.cbo.gov/publication/59014
The only presidential politician who sounded the alarm was Ross Perot, all the way back in the 90s.
Lyn Alden has been talking about this for a long time. If you want a good intro to the problem, I’d recommend this article of hers:
So I completely agree with this statement, but I completely disagree with the metric you've chosen to illustrate it.
"National debt" only exists due to the martingale of the Federal Reserve neutering the government's own monetary sovereignty. If we need to have an inflationary currency, then the new money should be spent by Congress on deliberate public goals - it's another tax.
You can tell "national debt" is a dodgy metric because it combines two very different things into one scary-in-the-context-of-household-finances thing. The portion of "the debt" that is Treasuries held by the Federal Reserve is the lesser bit of monetary creation that was actually spent for public goals, in spite of the fake "fiscal responsibility" narrative. It is moot as far as debt goes - nothing actually happens if it compounds to infinity.
The other portion of "the debt" that is held by private/foreign owners is the government functioning as a bank account of last resort, and could very well just be at the central bank instead.
What we currently have is a dog and pony show to pretend that we don't have this centralized fountain of money, in order for the financial industry to keep getting the first cut of low interest loans (which have mostly gone into bidding up the asset bubbles).
It relies on discipline in the government to prevent inflation, e.g. raising taxes and cutting spending. But this is a similar problem to what we have already. There is no discipline, just short term thinking due to bad incentives.
http://www.thomaspalley.com/docs/articles/macro_theory/mmt_r...
So, claiming this problem is bipartisan is nonsense. I’ll blame the dems for lots of stuff, but wildly inflationary fiscal policies and intentionally destructive economic policies aren’t on the list.
Then came 1994, and the "Contract With America". Republicans took over Congress. Their next budget made significant cuts then, not after Clinton was out of office. That's how "Clinton balanced the budget" - by a Republican Congress forcing him to live up to his words.
Lest you think this is a partisan statement, let me note that Republican Congresses never balance the budget when a Republican is President. But the historical record is that it wasn't just Clinton's achievement - a Republican Congress had to make him do what he wanted to make the next president do.
When have any of these presidents successfully pushed for reducing the federal deficit during their tenures? Any actual reductions to the debt you’ve seen?
What’s causing you to focus on presidents rather than congressional actions?
How do you think fiscal policy keeps getting passed through congress when there’s largely two parties that have to agree to get it done?
Early indications suggest he has already ruined it with tariffs, erratic jailing of skilled laborers and gutting of the government programs and agencies that were supporting the investment in the first place. The dollar has dropped 10% since inauguration day, inflation is way up and the deficit is ballooning.
SS/Medicare will bankrupt the country without reforms.
He even gave the advice not to sell that one.
It’s a good but toxic strategy. Give freely printed dollars in exchange for resources over 50years, and then make it worthless.
It is gobsmackingly dumb, but remember we have no evidence of him being anything other than gobsmackingly dumb. It's a very parsimonious explanation of everything he does.
Stephen Miran, the chair of the Council of Economic Advisers under Trump, is pretty much trying to do this. He published 'A User's Guide to Restructuring the Global Trading System', and it pretty much outlines why they should destroy the USD - in order to bring manufacturing home, so that the warhawks will no longer have any reason to not start a war with China
> CEA Chairman Steve Miran Hudson Institute Event Remarks
https://www.whitehouse.gov/briefings-statements/2025/04/cea-...
> we tax hardworking Americans mightily to finance global security. On the financial side, the reserve function of the dollar has caused persistent currency distortions and contributed, along with other countries’ unfair barriers to trade, to unsustainable trade deficits.
Money is fungible between these two concerns. The excess demand for USD is a source of revenue for our economic empire, realized by the continual monetary inflation without nearly as much corresponding price inflation. Some of that monetary inflation has been used by the government (~"deficit spending"), but the sheer majority has been getting dumped into the financial industry to bid up existing assets as a handout to the rich. That is what has left the American worker high and dry - near complete inability for the US government to use that already-centralized revenue to help wider society, due to a political movement based around fake austerity.
The article continues on using the passive voice to describe multiple things that the US government could have put a stop to any time it wanted, framed as if they were being done to us by other countries. For example:
> in the years running up to the 2008 crash, China along with many foreign financial institutions, increased their holdings of U.S. mortgage debt, which helped fuel the housing bubble, forcing hundreds of billions of dollars of credit into the housing sector without regard as to whether the investments made sense
Obviously if the government had set interest rates higher rather than lower, there would have been fewer mortgage bonds to buy and the dollars would have had to go elsewhere. I don't know if this pattern is deliberate or just an inevitable result of the bizzarro framing where having the world reserve currency is asserted to be a liability, but either way it is most certainly not honest.
What he is effectively saying is that large swaths of the American populace need to accept lower economic strength in order to decouple our reliance on our trading partners. And his reason for doing so is so that we can wage war on them. It's a completely nonsensical approach to maintain American hegemony. Why would any prefer strength through violence rather than maintaining the current system of American hegemony through trade?
While reserve currency status has it's warts, especially like he points out, the absolute immense amount of demand for US debt which fuels an uncontrolled spending crisis domestically I believe that is 1000% preferable to my daughters working in factories, and my sons dying in the Taiwan strait? For what? So that maybe the US can forcibly bomb China back into a nation of poor farmers and claim ideological victory over the communist project? It's completely inane.
You need to go one step further and ask yourself why he's proposing this. Instead of reexamining our relationship with China and asking ourselves how can we win in a multi-polar future, Miran and Trump have taken the view that China must remain a global adversary and we must maintain some sort of leverage on them.
It’s rare to have such a clearly evident case of cause and effect. We know why yields are going up. Because investors don’t believe the U.S. government can control their budget deficits.
The recent rising yields have little to do with money printing from 4-5 years ago.
(Back then, we bet on unprecedented inflation, and that’s been working out great so far.)
The rest of the world will probably not let the usd be the reserve currency, if the US does not show that it is able to manage that.
Monetary policy fails in low interest rate environments, and you get chaotic whipsaws thereafter which grow with time. You can find reference to this if you know where to look as far back as the 1930s.
Greedy corrupt blind individuals who have managed to infect leadership win so much that they lose everything.
We are getting a front-row seat to the specifics described in the socialist calculation problem, and it won't stop with just the US. This type of fire keeps burning until the fuel is out.
