Posted on 08/14/2026 5:37:59 AM PDT by SeekAndFind
For years, Americans have heard warnings about the national debt climbing into the tens of trillions of dollars.
The numbers have become so large that they barely register anymore.
Thirty trillion. Thirty-five trillion. Nearly forty trillion.
But the real danger may no longer be simply how much America owes.
It is how much America must now pay to keep borrowing.
The U.S. Treasury is selling 30-year government bonds at yields around 5.2%, potentially the highest borrowing cost for that maturity in roughly a quarter century.
That may sound like something only Wall Street investors should care about.
It isn't.
Because when the cost of borrowing rises for Washington, the effects eventually spread through the entire economy--from mortgages and retirement accounts to business loans, taxes and even America's ability to respond to future crises.
The basic problem is actually very simple.
Washington spends more money than it collects.
To cover the difference, the government borrows.
That borrowing creates interest payments.
When interest rates rise, those payments become more expensive.
Then Washington must borrow even more money--not only to fund current spending, but increasingly to service the debt it already accumulated.
That is how a debt problem begins feeding upon itself.
Interest on the public debt has already reached roughly $1.17 trillion this fiscal year, about 15% higher than a year earlier as Treasury borrowing costs have risen.
Think about what that means.
America is now spending extraordinary sums simply paying interest on money that was already spent.
That is not money building roads, strengthening the military, helping families or preparing for the next crisis.
It is the cost of yesterday's borrowing.
There is another warning buried inside the bond market.
America can still borrow enormous amounts of money. Investors are still buying Treasury bonds.
But increasingly, they are demanding higher interest rates to do it.
Part of the problem is sheer supply. Years of massive federal deficits have flooded the market with government debt.
At the same time, some traditional buyers are playing a smaller role.
Foreign ownership of U.S. Treasury securities has reportedly declined to around 23% from roughly 33% a decade ago.
That does not mean the world is suddenly abandoning the dollar.
But it does mean Washington cannot simply assume that investors will forever absorb trillions of dollars of new debt at extremely cheap rates.
And when investors demand more interest, taxpayers eventually pay the bill.
You may never purchase a Treasury bond in your life.
It can still affect almost every major financial decision you make.
Your mortgage: Higher long-term government bond yields can help keep mortgage rates elevated, making homes more expensive to finance.
Your home's value: When monthly mortgage payments rise, fewer people can afford to buy. That can weaken housing demand and put pressure on prices.
Your retirement account: Higher Treasury yields create competition for stocks. If investors can earn attractive returns from relatively safer government bonds, they may become less willing to pay high prices for risky investments. Recent increases in Treasury yields have already put pressure on equity markets.
Your job: Companies borrow money too. Higher financing costs can mean fewer expansions, delayed projects and slower hiring.
Your taxes and government services: The more Washington spends servicing debt, the less flexibility it has everywhere else.
Eventually politicians face unpleasant choices: cut spending, raise taxes, keep borrowing, or pursue policies designed to push borrowing costs lower--potentially creating new inflation risks.
None of those choices is painless.
Debt also limits national power.
America may someday need enormous financial resources to confront a recession, banking crisis, major war, pandemic or another unforeseen emergency.
But every trillion dollars devoted to interest reduces Washington's room to maneuver.
A nation drowning in debt does not need to technically default before the consequences become serious.
Financial weakness can gradually constrain military decisions, domestic priorities and America's ability to respond to geopolitical shocks.
That is why today's bond-market warning deserves more attention than another headline announcing that the national debt has crossed another trillion-dollar milestone.
The problem is changing.
For years, Washington could borrow staggering amounts of money while interest rates remained historically low.
That made enormous deficits easier to ignore.
But cheap money cannot be assumed forever.
And when a government carrying nearly $40 trillion in debt suddenly discovers that borrowing has become much more expensive, the consequences will not remain confined to Wall Street or the Treasury Department.
Eventually, they reach your mortgage.
Your retirement account.
Your job.
Your taxes.
And your kitchen table.
The debt crisis is becoming more dangerous--and whether Americans understand the bond market or not, they are increasingly likely to feel the consequences.
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I was calling out America’s debt when it first passed a trillion dollars.
It can be dealt with, possibly with minimal pain, but it does require a line in the American budget that is hard-wired in that the debt must go down netwise in very real terms in the budget process by law.
The debt will never be paid off, it was never intended to be. Governments are different. They can save the Dollar, or they can save the markets, but they can’t save both.
20% interest rates were what it took for the Volcker era Fed to stabilize the dollar in the 1970s after after a decade of oil price shocks and devaluation.
The entire US debt rolls over approximately every 4 years, all of it. At these now ever increasing higher interest rates. They can’t raise rates to anything approaching meaningful even if they wanted to without blowing the whole thing up. They have to make timely interest payments on existing debt, and it just consumes more and more of the pie. This is the problem, they painted themselves in a corner long ago.
bttt
So very few listen or pay attention. To consumed with having “fun” in life. Game of musical chairs...
This is a good article but the article is mislabeled. We don’t have a “debt crisis.” We have a SPENDING crisis. We have long-term, institutionalized, automatic spending that benefits powerful constituencies both inside and outside of the government. So politicians don’t have the guts to cut it or if they cut it, they only cut around the edges. How do we get to tens of trillions of debt without having a national crisis like World War II or the Civil War? It started with the Welfare State and spending just kept piling on incrementally over 100 years until we are where we are. Many of us have said it before - you could raise taxes to 100% on billionaires and it would fund the government for a couple months. You could confiscate their wealth and it would run the government for two or three years.
The real problem with the debt is the demands of the “investors” who buy it at an artificially-low rate. Nobody is dumb enough to spend that much money for a lousy return unless there are “sweeteners” involved. THAT is how banks get paid, by returns on their other investments. That is why the government continues to do what the people don’t want. That is why there is little transparency to it. That is what debt really does.
Paying back hundreds of billions of collected import duties / tariffs only exacerbated this - the payback was with borrowed money as that tariff money was swallowed immediately by the government outlays. One of the reasons the tariffs weren’t as inflationary as some feared was probably because it made the spending be with actual, real money instead of printed money. Notice the inflation got higher after the tariffs were halted and the money being forced to be paid back....but just a theory - I don’t know if there is any way to actually prove or even test that hypothesis.
How do we get to tens of trillions of debt without having a national crisis like World War II or the Civil War?
- - - - - - -
How about simply not paying? Transfer a big part of the problem from Americans to those who lent the government money. From an ethical perspective, ordinary Americans didn’t individually agree to take debt, so they have no obligation to pay it.
Nothing in the story about how a growing economy factors in to debt. Growth allows more government revenue to pay debt interest and principal, it’s not a zero sum game. I’m not saying debt isn’t an issue, just that the entire article leaves out a critical input in the calculations.
I only have good debt. If the Government can’t manage our money ,let us have it. I say we need to stop paying taxes. These bastards have stolen enough of our hard earned money.
In 2019, nearly every single Republican office holder claimed that the size of the Federal government was too big and it spent too much money.
The federal expenditures in 2019 were $4.4 Trillion dollars.
The revenues in 2025 were $5.0 Trillion dollars.
If we simply spent as much money in 2025 as we did in 2019 (which was still too much), we would have a $600 billion surplus.
Too bad we only have a Republican President, Republican Senate, Republican House and Republican Supreme Court.
Maybe if we just vote for them one more time, they will do what they have been promising to do for 2 generations.
We have been abandoned.
Keeping interest rates at near zero allow the US Government to borrow with impunity for decades. Interest rates started dropping in the 1990s under Bush, but really accelerated under Clinton. Now they have hit a wall and interest will creep up. It isn’t even just real investor money anymore - increasingly, it is Federal Reserve funny money.
This does not end well. Goverment has made far more promises than it can keep. And its far from being just our problem. When it finally blows (and it will), its going to be like a super volcano eruption.
RE: Maybe if we just vote for them one more time, they will do what they have been promising to do for 2 generations.
… And a socialistic Democrat President, Senate and Congress is going to lessen or even solve our debt problem?
Let’s be blunt — the analogy is a train headed towards a cliff. Voting Republican slows the train down but the direction is still headed towards the cliff. Voting Democrat means accelerating the train towards the same direction.
Hope this is a major issue of 2028. Rubio has always talked about slowing the growth of major mandatory spending programs (SS & Medicare) which would be a first step but whether he campaigns for president on it is a different matter.
Asking Congress to control spending is like:
...giving a sixteen year old guy a car with a keg of beer inside and telling him not to drink and drive...
Good luck.
Lol.
Wait until the World figures out it is foolish to lend money to America. That is when the printing presses go into full gear and hyperinflation hits.
Milton Friedman made the argument that a Balanced Budget Amendment was the solution. State Legislatures almost forced the issue by asking for a Convention Of States. Congress responded with a fake solution and the effort faded away.
FTA
Due to the ntl debt skyrocketing into the trillions, the rate of borrowing rises
for Washington, with concomitant effects spread through the entire economy.
Affecting mortgages and retirement accounts to business loans,
taxes and even America’s ability to respond to future crises.
We have a medicare, medicaid, social security crisis. All 3 are mismanaged. And we also have a wasteful spending crisis.
GOVERNMENT IS NOT DIFFERENT AND IT IS NOT ITS JOB TO INFLATE THE MARKET AT THE EXPENSE OF OUR CURRENCENY!
In fact that is corruption. It’s job is to protect the financial system.
Your post is bizarre.
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