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Upsetting how we are reaching these lows while the administration is accusing everyone else of wasting taxpayer money except for themselves. At least under previous administrations you would get something for your money, like science funding and healthcare for the needy, not just bombing runs and posturing.
The Republicans have ran on 'starve the beast' and intentional breaking of our government/programs/etc in order to meet their philosophical aims for 40 years. Republicans actively try to damage our country and do bad fiscal policy because they put their agenda over the the health of the nation.
It's not surprising they don't care because they literally have policy to do damage like this and their explicit goal has been this exact outcome.
Both can be true. The previous administration bailed out the unfunded pension funds of cities and state employees when they did Covid-19 bailouts despite it having nothing to do with Covid-19 and without requiring these local governments to properly fund these pensions moving forward. They bailed these pension programs out many times more than their financial support for restaurants they forced closed. Basically, America has an economy that is buoyed by AI development and infrastructure spending right now but is poised to pop and the national debt has been ballooned by two to three generations of political leadership failing to properly address underlying issues and instead printing money.
As much as people may dislike Regan, his goal for reducing taxes on the wealthy was based upon the laffer curve. https://en.wikipedia.org/wiki/Laffer_curve
The hypothesis is that lowering taxes rates will actually increase government revenues.
The Trump cuts don't feel like they're laffer optimal. Instead they feel like political capture by the wealthy class. A cumulative of left of laffer optimal tax strategies over the past years have resulted in a deficit growing at rates which now exceed what a laffer peak rate would now support.
- the rich got their tax breaks, and have contributed to deficits for decades. Now they complain that social security entitlements must be cut to keep within our means.
I don't want to waste money bombing Iran either, but the total cost of the operation has been $37.5 billion. Meanwhile, Medicare, Medicaid, and Social Security each grew around $100 billion in the last year.
It always gives me an ominous feeling to see these headlines. It's like we're walking out further and further on a frozen lake. "Hey, it's OK, the ice hasn't cracked yet! Let's keep going!"
I think that's a pretty solid (pun intended) metaphor.
Past performance is not a predictor of future returns.
Total debt / GDP is the wrong metric for that. There's no limit to the serviceability of debt in a currency you print.
It makes more sense to conceptualise it as the total size of a giant savings account run by the government.
We are walking further out on the ice but that is measured more in other ways - with harder metrics like inflation, access to cheap energy, resources, industrial density and capabilities and access to technology - not this headline number.
I've always heard people say that the US debt doesn't matter when the debt itself is denominated in USD.
It's the old saying, if you owe the bank $1,000 then you have a problem. But if you owe the bank a trillion dollars then the bank has a problem.
Especially when that trillion dollars was spent on an insane fleet of aircraft carriers.
end is probably ww btw. so are you all ready? last time it did work and lost of war debt was paid
Debt-to-GDP ratio is useful for comparing the debt loads of two countries, but not terribly useful in assessing the serviceability of debt for a single country.
That is, suppose two countries both have $100B in debt. One of them is a small island nation; the other is a global superpower. Obviously the global superpower will be better able to handle that - dividing by GDP helps make that clear.
However, this simple division doesn't tell you some important things. How much of the debt comes due very soon? It's worse if the answer is "most of it." How was it incurred? "Winning a war" is much better than "losing a war."
The United States has lots of debt, and personally I'm worried about the long term serviceability of it. But the ratio to GDP isn't why!
But the doesn't come due. So long as you can cough up the interests.
This Is Probably Fine! by Patrick Boyle - https://www.youtube.com/watch?v=5nvsDmwZWdM - May 29th, 2026
> US 30-year Treasury yields just hit 5.2% — the highest level since July 2007. UK gilt yields are at levels not seen since 1998. Japanese bond yields are at record highs. Something is happening in global bond markets, and it's not just about inflation. In this video I explain what's driving the global rise in long-term borrowing costs, why the era of free money is probably over, and what fiscal dominance means for central bank independence. I cover the history of US presidents fighting with the Federal Reserve — including LBJ shoving his Fed Chair against a wall — the 1970s UK economic collapse, the Liz Truss mini-budget crisis, the role of private credit and off-balance-sheet SPVs in financing the AI boom, and what all of this means for the new Federal Reserve Chair Kevin Warsh.
It's hard to imagine a political solution to this problem. Both parties are playing chicken, each daring the other to fall on their sword for the good of the country, with neither willing to commit political suicide. Republicans don't have the stomach for the (unpopular) spending cuts that would be required to reduce the deficit, and of course they don't want to raise taxes. They reasonably fear that, even if they gutted the core programs to balance the budget, the next Democrat administration (whose election would be essentially guaranteed by massive cuts) would turn around and use the savings to fund new and exciting ways to buy votes. On the flip side, Democrats shriek in horror at the slightest spending cuts and even advocate for massive increases in spending ("Medicare for all" alone would cost another $1.5 Trillion per year) yet they are afraid to acknowledge, let alone levy, the (unpopular) broad-based taxes required to cover the current deficit, let alone pay for new programs.
It is the ultimate tragedy of the commons.
Everyone hates regulations until they realize every regulation actually does something. Everyone hates spending until they realize the money goes towards something.
None of this will get solved until a crisis
Not an American, but I would argue that this level while little bit of a concern is not a huge issue for a superpower that borrows in its own currency and has the military and economic might to crush any party (sovereign or corporate) attempting move away from that system.
You guys are too powerful.
Some of that power comes from things like US Treasuries being rock solid, and this is the sort of thing that could change that. There are other players out there and other ways the world could trade and fiance.
There's a LOT of reasons for them to not want to do that, and the status quo benefits a lot of other powerful players as well, but screwing up treasuries would be a quick way to change that math.
We are still too powerful, but we're squandering that power alarmingly fast. We have destroyed diplomatic soft power. Our software industry used to be able to rely on getting 50% of their revenue outside the US, but we can't be trusted now, and that market can no longer be counted on.
One can get away with being an asshole only so long.
Maybe so, but our weakness is that we depend on new debt to finance our government spending. If investors stopped buying that debt, the US government would have to make sudden, dramatic spending cuts.
And that's not a problem that's solvable with military might! "Investors around the world are declining to buy US government bonds" can't be bombed the way an oil refinery can be.
Reserve status is based on confidence. The US can't bomb markets into trusting the dollar. They've already begun diversifying away from it.
Some things feel impossible until they happen.
It's not a problem when other nations borrow in the fiat currency. They're being taught to seek alternative, more tolerable regimes to invest in. Once they establish a better alternative they won't come back.
We seem to be lacking in military might lately, and are increasingly losing economic might.
Bingo! Any country borrowing in its own sovereign currency cannot default on debt in that currency, unless it actively decides to do so for political reasons.
Slaps the hood of a cybertruck
This bad boy can hold a LOT of debt.
This country is a cybertruck.
The US Dollar is chronically over-valued because of its reserve currency status. The US wanted it that way, opposing Keynes proposal of an international clearing union using a clearing currency (which he called the Bancor) that is independent of any specific country. This automatically means that US companies suffer a huge competitive disadvantage which results in an external deficit. The foreign sector accumulates dollar savings. Now the US household sector naturally also runs a surplus. This only leaves the companies and the government which must by logic of sectoral balances run a deficit for the economy not to shrink. The companies are in aggregate also running a surplus since the neoliberal shift and that leaves only one sector that must have a matching deficit if you want to at least keep up economic activity. If the government sector wants to run a surplus that automatically and necessarily must mean that one of the other sectors must run a deficit by logic of accounting. Which one should that be and how do you want to force it to run a deficit? The foreign sector is not an option as long as the US Dollar is the dominant reserve currency because it is overvalued. The households are a natural saver almost always running a surplus. That leaves only the companies to run a deficit. Now how do you get the companies to run a deficit (in aggregate of course, we are not talking about a single company)? You need to make them invest more than they earn. This used to be the role the company sector had until the 70s. Since then we got Thatcher and Reagan with financialization, deregulation, pressure on wages (they fell from about 70% of GDP to about 60%). The government will have to run massive deficits just to keep the economy going unless we roll that back.
>Relative to the size of the economy, interest costs would reach 3.2 percent of gross domestic product (GDP) this year — eclipsing the previous high set in 1991.
>As a share of federal revenues, federal interest payments rose to 18.5 percent by the end of last year, exceeding the previous high set in 1991.
https://www.pgpf.org/programs-and-projects/fiscal-policy/mon...
The stock and real estate market, huge sources of wealth for the us population, are still near all-time highs and many people, tens of millions at least, have way more real money than they’ve ever had in their lives, and yet a massive number of those people would rather not take a hit to their wealth when it’s easiest to absorb the hit and instead prefer cutting things that even they like the government providing (medicare this week the latest example in an endless number of examples these past months). It really is crazy how wealth-obsessed many Americans are.
And I say that as an absolute hater of how the pols run the place (yes both sides. One for having no sense of how to manage money and the other having some sense but ignoring it; one of these is objectively worse than the other (yep, I said it, objectively!)).
Seems like the end goal is not to have a country left but instead a bunch of factions more likely to be at war fighting over cash, resources and culture issues. Depressing as fuck for those of us not excited about that end goal.
The entire world is super leveraged at levels generally seen during major recessions or wars.
And that's excluding the huge amount of multi tiered private credit.
While this is not an indication of anything bad on its own it definitely creates the conditions for cataclysms.
It's like being on a very very dry hay field, it does not mean that you're bound to die on fire, it just means that the risks of a fire being extremely destructive are high.
Why is this a meaningful figure? It's not debt that matters its how much it costs to finance it. It's Finance 101 that if you manage to borrow below inflation rate, and you have the luck that what you paid for appreciates, then your debt will disappear over time.
On the contrary, trivial amounts of money with usury can ruin you financially.
This Finance 101 perspective is too clever by half.
Sounds like a great idea, right? But what if something out of your control[1] happens, and average interest rates on the debt burden go up from 2% to 14%? The USA can't afford to just pay off all of its debts. It must continuallly roll over it's old debts to new debts, and could easily find itself in a situation where debt servicing costs go up by an order of magnitude if the fiscal situation changes for long enough.
[1] Or in the case of the United States, you do something very stupid and very inside of your control
> It's Finance 101 that if you manage to borrow below inflation rate
And when was the last time that happened? Pretty much only during inflation spikes. The vast majority of time, inflation is around 2% or maybe 3 or 4 recently, 10 year Treasury yields is well above 4.5%.
So maybe you have 40T USD lying around, and you're willing to lend it all to uncle Sam for inflation -.1%. if that's not the case then it's finance 101, and wishful thinking
Let the market decide
Applies only if you are the reserve currency, label everyone else who don't use your currency the way you want it as currency manipulators and you can take whatever debt you want because well the printer can pay everything back in the future.
The Federal Budget in Fiscal Year 2025: An Infographic
The wisdom was that the US dollar due to its exorbitant privilege (https://en.wikipedia.org/wiki/Exorbitant_privilege#Origin) can afford these debts.
Countries put up with it because the US "provided protection" and insured maritime freedom of navigation. Oh wait ...
Dangerously close to discovering the premise of Accidental Superpower from first principles.
On the bright side it isn't growing and is down from the pandemic-era 132% of GDP. (Although maybe that was because GDP shrank rather than any change in fundamental debt.)
Are we looking at the same graph?
It appeared to drop from the 2020 highs, yes.
But it's definitely trending upward.
The GDP was a little smaler during Covid.
https://fred.stlouisfed.org/series/GDP/
I wonder what the exit plan is. One time conversion of social security into Trump accounts and call it a day?
Japan is at well over 200%, and has a very real population crisis.
Italy is 138%, France is at 117%, Canada is at 110%. UK and China are around 100%.
123% comparatively speaking isn't great, but it's not shockingly terrible.
time to buy bitcoin
This still isn’t too bad compared to other countries, also, most of the AI industry profits are still yet to be fully realized.