The US Debt Problem

[bannork]

At $36trillion (£29trillion), the national  US debt is larger than the economy: it is the highest in the world.

US debt rose from $5.8trillion in 2001, with Trump adding $7.8trillion in his first term, and Biden piling on another $8.5trillion during his tenure.

However, the US government has been able to borrow almost unlimited amounts of money at reasonable rates of interest thanks to the status of Treasury bonds.

In other words IOUs, as the ultimate in secure investments.

Foreign governments have been big holders of US Treasuries because of their perceived security status.

What to do?

Stephen Miran, chair of Trump's council of economic advisers, proposed the 'Mar-a-Lago accord', a plan whereby foreign governments would be 'persuaded' into trading in the Treasuries they currently hold for much longer dated US debt, with maturities of up to 100 years.

Trump has, however, recklessly squandered goodwill among former allies who might have been open to persuasion.

Now it's 'Donald no mates' Trump except for Russia, Belarus and Israel.

And China, the second-largest holder of US Treasuries holding about $760billion, is rumoured to have been steadily reducing their holdings, prompting Trump to refer to people getting 'yippy'.

RUTH SUNDERLAND: Donald Trump has a big debt problem

[3NUMBAS]

Investors dump US government bonds as faith in America falters

BUSINESS

Investors are dumping once-reliable US government bonds, sparking fears that major banks and traders are losing faith in America as a safe place to store their money. That could be bad news for US President Donald Trump, who had hoped his tariff pause earlier this week would restore confidence in the markets. 
https://www.france24.com/en/business/20250412-investors-dump-us-government-bonds-faith-america-falters-tariffs-trump

 

[blaze master]

Maybe America shouldn't of borrowed so much money. This has been going on for decades. 

[LosLobo]

If you missed it, Ray Dalio, founder of Bridgewater Associates—the world’s largest hedge fund was on Meet the Press yesterday, warning that the U.S. is heading toward a financial crisis—not because of the total debt, but because of the deficit that’s growing it.

• He says we need to bring the deficit down to 3% of GDP. Right now it’s over 6%.

• High deficits, rising debt, and higher interest rates are a dangerous mix.

• Trump’s plan to extend his tax cuts without offsets would make things worse.

• Tariffs and trade disruption add to the instability.

• Dalio says a “debt heart attack” is possible within a few years if nothing changes.

He’s not focused on the debt number itself—but the pace and recklessness behind it. And right now, that pace is accelerating.

 

[Cameroni]

4 minutes ago, LosLobo said:

If you missed it, Ray Dalio, founder of Bridgewater Associates—the world’s largest hedge fund was on Meet the Press yesterday, warning that the U.S. is heading toward a financial crisis

 

Yah, he has been saying that for the last 5 years.

[LosLobo]

3 minutes ago, Cameroni said:

 

Yah, he has been saying that for the last 5 years.

Yes, and the numbers have only gotten worse—especially now with the deficit over 6% of GDP and Trump doubling down on the same policies that helped create the imbalance in the first place.

If someone’s been warning about a leak for five years and the water’s now up to your knees, maybe it’s time to listen.

[Lacessit]

The US has been able to sustain its debt levels due to trust in the USD as a reserve currency, and the safe haven of US Treasury bonds. It was servicing said debts at lower than market interest rates, compared to other countries.

 

That trust has evaporated in just two months of a Trump presidency. Investors are seeking other safe havens. China is selling off its US bonds. Countries that were allies have been alienated. Why deal with a country that puts tariffs on you, when there are tariff-free markets elsewhere?

 

The problem with trust is it takes much longer to get it back than it does to lose it.

[Cameroni]

11 minutes ago, Lacessit said:

The US has been able to sustain its debt levels due to trust in the USD as a reserve currency, and the safe haven of US Treasury bonds. It was servicing said debts at lower than market interest rates, compared to other countries.

 

That trust has evaporated in just two months of a Trump presidency. Investors are seeking other safe havens. China is selling off its US bonds. Countries that were allies have been alienated. Why deal with a country that puts tariffs on you, when there are tariff-free markets elsewhere?

 

The problem with trust is it takes much longer to get it back than it does to lose it.

 

No, it is because the US does not have a debt problem. The strength of the US economy is why people biy US Treasury bonds. Not because they like America so much.

 

In effect the US could easily wipe out its debt. Yes, 36 trillion USD of debt sounds like a lot, but when you factor in that the US creates wealth of 29 trillion USD GDP EVERY SINGLE YEAR, you quickly realise that the US debt is not a problem.

 

If the US wanted, it could pass a tax and wipe out national debt in a few years. However, there is no reason to do so. It is not a problem.

[MalcolmB]

8 minutes ago, Lacessit said:

China is selling off its US bonds.

Can you explain how that works?

Who are they selling to?
and how does that affect the USA?

[Lacessit]

https://www.abc.net.au/news/2025-04-13/trumps-tariffs-destroying-americas-exorbitant-privilege/105164676

[NoDisplayName]

16 minutes ago, Cameroni said:

No, it is because the US does not have a debt problem.

 

It's not "just" a debt problem.

 

US National Debt:   $36,236,275,260,999

 

Slowly at first, then........

 

Total US Unfunded Liabilities:  $123,306,875,956,450

 

https://usadebtclock.com/

 

 

[Lacessit]

15 minutes ago, Cameroni said:

 

No, it is because the US does not have a debt problem. The strength of the US economy is why people biy US Treasury bonds. Not because they like America so much.

 

In effect the US could easily wipe out its debt. Yes, 36 trillion USD of debt sounds like a lot, but when you factor in that the US creates wealth of 29 trillion USD GDP EVERY SINGLE YEAR, you quickly realise that the US debt is not a problem.

 

If the US wanted, it could pass a tax and wipe out national debt in a few years. However, there is no reason to do so. It is not a problem.

So why are investors selling US bonds along with shares? That did not happen even in the Great Depression. Bond yields are spiking.

 

Trump wants to give tax cuts to billionaires, I doubt you would be welcome in his circle of advisors.

[Lacessit]

20 minutes ago, MalcolmB said:

Can you explain how that works?

Who are they selling to?
and how does that affect the USA?

They are selling to whoever will buy them. The Treasury itself will probably step in to support the price, much like the Russian Central Bank has supported the ruble.

 

It affects the USA because bond yields go up in response to a bear market in them. That yield increase means America has to pay more to service its debt.

[Cameroni]

7 minutes ago, Lacessit said:

So why are investors selling US bonds along with shares? That did not happen even in the Great Depression. Bond yields are spiking.

 

Trump wants to give tax cuts to billionaires, I doubt you would be welcome in his circle of advisors.

 

The reason is Germany. Germany declared its intention to rearm and warned the markets that this will entail a massive debt orgy. As a result the prices of bonds have fallen across the board as investors dump assets that have lost value.

 

https://markets.businessinsider.com/news/bonds/germany-defense-government-spending-boost-bund-yields-global-bond-selloff-2025-3

[nauseus]

4 hours ago, bannork said:

At $36trillion (£29trillion), the national  US debt is larger than the economy: it is the highest in the world.

US debt rose from $5.8trillion in 2001, with Trump adding $7.8trillion in his first term, and Biden piling on another $8.5trillion during his tenure.

However, the US government has been able to borrow almost unlimited amounts of money at reasonable rates of interest thanks to the status of Treasury bonds.

In other words IOUs, as the ultimate in secure investments.

Foreign governments have been big holders of US Treasuries because of their perceived security status.

What to do?

Stephen Miran, chair of Trump's council of economic advisers, proposed the 'Mar-a-Lago accord', a plan whereby foreign governments would be 'persuaded' into trading in the Treasuries they currently hold for much longer dated US debt, with maturities of up to 100 years.

Trump has, however, recklessly squandered goodwill among former allies who might have been open to persuasion.

Now it's 'Donald no mates' Trump except for Russia, Belarus and Israel.

And China, the second-largest holder of US Treasuries holding about $760billion, is rumoured to have been steadily reducing their holdings, prompting Trump to refer to people getting 'yippy'.

RUTH SUNDERLAND: Donald Trump has a big debt problem

 

China has been steadily reducing their holdings for years.

[frank83628]

2 hours ago, blaze master said:

Maybe America shouldn't of borrowed so much money. This has been going on for decades. 

No no no, there were no issues before 23:59, 19.1.25....  until trump... arrrggh

[swissie]

29 minutes ago, Cameroni said:

 

No, it is because the US does not have a debt problem. The strength of the US economy is why people biy US Treasury bonds. Not because they like America so much.

 

In effect the US could easily wipe out its debt. Yes, 36 trillion USD of debt sounds like a lot, but when you factor in that the US creates wealth of 29 trillion USD GDP EVERY SINGLE YEAR, you quickly realise that the US debt is not a problem.

 

If the US wanted, it could pass a tax and wipe out national debt in a few years. However, there is no reason to do so. It is not a problem.

Taxes is a dirty 5 letter word.

 

Better: Everybody in the US works for free for 2 years.

 

Or even more better: Kick off some hyperinflation. The most elegant solution.

 

[Cameroni]

2 minutes ago, nauseus said:

At $36trillion (£29trillion), the national  US debt is larger than the economy: it is the highest in the world.

 

This is nonsense of course. The US economy is considerably larger than 36 trillion USD. The US creates 29 trillion USD of GDP in wealth every single year. But this figure does not account for many other existing assets of the US economy.

[Lacessit]

9 minutes ago, NoDisplayName said:

 

It's not "just" a debt problem.

 

US National Debt:   $36,236,275,260,999

 

Slowly at first, then........

 

Total US Unfunded Liabilities:  $123,306,875,956,450

 

https://usadebtclock.com/

 

 

Most of the USA unfunded liabilities are SS and Medicare. Also federal employee pensions.

 

Trump promised he would not cut either. Yeah right.

[nauseus]

44 minutes ago, Lacessit said:

The US has been able to sustain its debt levels due to trust in the USD as a reserve currency, and the safe haven of US Treasury bonds. It was servicing said debts at lower than market interest rates, compared to other countries.

 

That trust has evaporated in just two months of a Trump presidency. Investors are seeking other safe havens. China is selling off its US bonds. Countries that were allies have been alienated. Why deal with a country that puts tariffs on you, when there are tariff-free markets elsewhere?

 

The problem with trust is it takes much longer to get it back than it does to lose it.

That trust has been evaporating for years, too.

[Lacessit]

1 minute ago, Cameroni said:

 

This nonsense of course. The US economy is considerably larger than 36 trillion USD. The US creates 29 trillion USD of GDP in wealth every single year. But this figure does not account for many other existing assets of the US economy.

It doesn't account for unfunded liabilities either.

[Cameroni]

1 minute ago, swissie said:

Taxes is a dirty 5 letter word.

 

Better: Everybody in the US works for free for 2 years.

 

Or even more better: Kick off some hyperinflation. The most elegant solution.

 

 

But why? Why not just let the Japanese, Germans and the rest of the world finance the debt with IOUs? Why is it a problem now?

 

The US economy is still creating 29 trillion USD of wealth every SINGLE year! I mean aggregate this over 20 years.

[nauseus]

14 minutes ago, NoDisplayName said:

 

It's not "just" a debt problem.

 

US National Debt:   $36,236,275,260,999

 

Slowly at first, then........

 

Total US Unfunded Liabilities:  $123,306,875,956,450

 

https://usadebtclock.com/

 

 

 

I hope you can get your message across. I tried....but nooooo. 

[swissie]

37 minutes ago, Cameroni said:

 

No, it is because the US does not have a debt problem. The strength of the US economy is why people biy US Treasury bonds. Not because they like America so much.

 

In effect the US could easily wipe out its debt. Yes, 36 trillion USD of debt sounds like a lot, but when you factor in that the US creates wealth of 29 trillion USD GDP EVERY SINGLE YEAR, you quickly realise that the US debt is not a problem.

 

If the US wanted, it could pass a tax and wipe out national debt in a few years. However, there is no reason to do so. It is not a problem.

Alone to pay interest on the outstanding dept it's nummber 3 as far as annual budget deficit is concerned. If that's not alarming, then I don't know what is.

 

[black tabby12345]

2 hours ago, 3NUMBAS said:

 

Investors dump US government bonds as faith in America falters

BUSINESS

Investors are dumping once-reliable US government bonds, sparking fears that major banks and traders are losing faith in America as a safe place to store their money. That could be bad news for US President Donald Trump, who had hoped his tariff pause earlier this week would restore confidence in the markets. 
https://www.france24.com/en/business/20250412-investors-dump-us-government-bonds-faith-america-falters-tariffs-trump

 

 

Looks 100% Self-Inflicted.

From the leader of the free world, to the new enemy of the west.

 

[black tabby12345]

2 hours ago, blaze master said:

Maybe America shouldn't of borrowed so much money. This has been going on for decades. 

 

Debt problem has been worsening since 1980s(especially by Reaganomics; encouragement of consumption on debt).

But by now, other countries willingly bought US bond as the form of secure investment(as the USA was trusted).

But now, they are changing their way to look at USA, due to Trump's hostile policies to the free world.

No longer regarded as the leader of the free world.

Pretty natural response, from anyone's standard.

Return the hate to the hate.

Just a matter of human nature.

Whether at individual or state level.

 

[black tabby12345]

22 minutes ago, nauseus said:

That trust has been evaporating for years, too.

 

Trump sped it up dramatically LOL.

In less than 100 days after he took office.

 

 

[nauseus]

7 minutes ago, black tabby12345 said:

 

Trump sped it up dramatically LOL.

In less than 100 days after he took office.

 

 

 

LOL

[NoDisplayName]

32 minutes ago, Lacessit said:

Most of the USA unfunded liabilities are SS and Medicare. Also federal employee pensions.

 

Trump promised he would not cut either. Yeah right.

 

If the programs go bankrupt, then he doesn't have to cut them.

 

Winning!©

[black tabby12345]

1 hour ago, Lacessit said:

That trust has evaporated in just two months of a Trump presidency.

 

Inept businessman(whose companies busted half dozen times, or even more?).

But as the Russ agent, doing the absolutely remarkable job.

Causing this much cracks among the west in less than 3 months since he took office.

Europe now sees US as the enemy.

 

The US is now the enemy of the west

 

Yes, America Is Europe’s Enemy Now

 

Trump’s America is Putin’s ally now – POLITICO