Treasury Markets Shrug at $40 Trillion U.S. Debt as 30-Year Yields Match 2001
Updated
Updated · RealClearMarkets · Aug 18
Treasury Markets Shrug at $40 Trillion U.S. Debt as 30-Year Yields Match 2001
2 articles · Updated · RealClearMarkets · Aug 18
Summary
$40 trillion in U.S. debt has not triggered a bond-market alarm, with the report arguing the widely discussed “debt disaster” is already fully priced by Treasury investors.
30-year Treasury yields are roughly where they were in 2001, when federal debt stood at $5.8 trillion, suggesting markets still expect the government to repay even far larger borrowing.
The piece challenges warnings that demographics make the debt unmanageable, noting the worker-to-senior ratio has fallen to 2.7 from 6 in 1952 but arguing economic growth expands the tax base and borrowing capacity.
Its broader claim is that the real disaster is not an imminent debt blowup in the 2030s, but the economic progress lost because heavy taxation and persistent government spending remain politically sustainable.