"Deficit spending by the U.S. government is in a runaway scenario," said Mark Thornton, a senior fellow at the classical liberal Mises Institute. "The amount of money that they're borrowing is at extremely elevated levels and there doesn’t seem to be any regulation or even mild attempts to curb the spending side of the fiscal equation...
Government debt stood above $33 trillion in fiscal year 2023 (the 12 months that ended on Sept. 30). That’s about $1.7 trillion more than the year before. Interest on the debt has been growing steadily for decades, although at a relatively slow pace to about $570 billion in 2019 from about $350 billion in 1995—an annual increase of some 2 percent.With the explosion of government spending during the COVID-19 pandemic and the subsequent interest rate increases by the Federal Reserve, the debt cost has skyrocketed by more than 50 percent between 2019 and 2023. Over the past year, it has already surpassed the entire military budget."
"....If the government wants to borrow without worsening inflation, it needs to find somebody to buy the debt with existing dollars.Until recently, that hasn’t been a problem. Despite offering measly interest, U.S. Treasurys served as a safe haven investment—a hedge against risk and an indispensable collateral in complex investment schemes in financial markets.“U.S. Treasurys were seen as the safest asset. And increasingly that’s not the case today,” Mr. Antoni said.In August, the Fitch rating firm downgraded U.S. debt to AA+ from AAA.On Nov. 9, the Treasury had the worst auction of 30-year Treasurys in more than a decade as investors demanded a premium to buy the bond. Demand was down by almost 5 percent from the month before.On Nov. 10, Moody's, another rating firm, lowered the U.S. debt outlook to “negative” from “stable,” arguing that polarization in Congress is likely to thwart fiscal reforms.“People are increasingly realizing today [that U.S. Treasurys] aren’t safe at all,” Mr. Antoni said.
Would the American people of today be able to handle hyper-inflation as the Germans of the 1920s had to? Expectations of life are immeasurably different. Fasten your seatbelts, there are drunken sailors on the road ahead.
