A Day Of Reckoning Arrives For U.S. Treasuries Just As The U.S. National Debt Reaches $40,000,000,000,000

We all knew that this was coming. For ages, people like me have been ranting that we would be facing a financial nightmare if we didn’t get the national debt under control. Of course most of the population didn’t want to listen, and they just kept sending big spenders back to Washington. Now we are 40 trillion dollars in debt and we are spending well over a trillion dollars a year just in interest on that debt. Nobody can deny that we have reached a stage where our debt spiral is totally out of control. The federal budget deficit for the month of July was 432 billion dollars. Interest on the national debt for the month of July was 118 billion dollars. Now Treasury yields are spiking as investors become hesitant to buy more of our debt. Borrowing costs are rising to very alarming levels, and we are in far more trouble than most people realize.

The size of the national debt officially crossed the 40 trillion dollar threshold on Tuesday…

The U.S. national debt has surpassed $40 trillion for the first time, marking a historic milestone in a borrowing buildup that has accumulated over generations, through wars, recessions, tax changes, and the expansion of major federal benefit programs under presidents of both parties.

The Treasury Department reported that total public debt outstanding reached about $40.047 trillion Tuesday, according to The Wall Street Journal and The New York Times.

This is money that we have stolen from future generations of Americans.

What we have done to our children and our grandchildren is beyond criminal.

People should be going to prison over this.

Thanks to years of absolutely reckless spending, the size of the national debt has more than doubled in less than 10 years…

The Treasury Department’s daily financial report shows that the nation’s debt reached $40.05 trillion on August 18, more than double its level in 2017. The federal debt has ballooned because government spending is outstripping revenue, forcing the U.S. to borrow more money to cover the shortfall.

Our politicians are literally destroying the future of this country.

In 1980, the size of our national debt was just reaching 1 trillion dollars.

When Barack Obama entered the White House, the size of the national debt was sitting at about 10 trillion dollars.

Now we are 40 trillion dollars in debt with no end in sight…

We just hit 30 trillion dollars about 4 years ago.

How long would it take us to hit 50 trillion dollars?

If Elon Musk donated his entire fortune to the government, it would barely even make a dent in the national debt…

The sheer scale of America’s $40 trillion debt is hard to fathom. The amount is significantly greater than U.S. annual GDP. That means even if all U.S. income went toward paying down the debt for a full year—rather than to things like salaries, corporate profits and investment—the federal government would still owe trillions, by this measure.

If Elon Musk helped pay down the debt by sacrificing the entirety of his nearly $1 trillion net worth—itself a mind-boggling sum—it would barely make a dent. The gross debt owed by the federal government is also nearly equal to what is owed by all U.S. households and businesses combined (excluding banks).

Even if you took every single penny from every single billionaire in this country, that would only get you about 8 trillion dollars.

We are drowning in debt with no way out.

At this stage, we are spending more on interest on the national debt each year than we are on either the U.S. military or Medicare…

As the government continues to borrow, interest payments are consuming a larger share of the nation’s spending, creating a compounding effect that further fuels the debt. The U.S. government now spends more on servicing its debt than on national defense or Medicare.

We really are in the endgame.

At the same time that our national debt has hit 40 trillion dollars, a moment of reckoning has arrived for the Treasury market…

The fiscal pressures are increasingly visible in the bond market.

The yield on the 30-year Treasury recently reached roughly 5.3%, its highest level in nearly two decades, according to the Journal and Reuters.

Higher Treasury yields increase the government’s cost of issuing and refinancing debt and can also influence borrowing costs for households and businesses.

Government borrowing costs are starting to spike.

In a desperate attempt to calm investors, the U.S. Treasury Department conducted a dramatic intervention on Wednesday…

In a move announced Wednesday morning, the Treasury Department, led by Secretary Scott Bessent, said it would at least double the size of its government debt buybacks, starting Sept. 9 and running through Nov. 4.

Yields tumbled following the announcement, with the 30-year down about 10 basis points after previously hitting its highest in about 19 years, predating the global financial crisis in 2008.

But it didn’t work.

On Thursday, yields on long-term Treasury bonds bounced right back…

Bond yields climbed Thursday, erasing most of the pullback they saw the previous day after the Treasury Department announced an intervention aimed at easing pressure on longer-dated government debt.

The yield on the 30-year U.S. Treasury bond — the primary focus of the accelerated buyback — was up more than 6 basis points at 5.256%.

Yields on 10-year U.S. Treasurys — the main benchmark for mortgages, auto loans and credit card debt — moved more than 5 basis points higher to 4.704%.

This is a really big deal.

And there aren’t going to be any easy fixes, because as Wolf Richter has aptly pointed out, there is only so much that U.S. Treasury Secretary Scott Bessent will be able to do moving forward…

Going forward, yields will have to be high enough to entice bond buyers off the fence and buy an additional $1 trillion of new Treasury securities every three to five months or so; yields have to be high enough to overcome their fears about inflation, government profligacy, and the new supply pushing up yields even higher.

This didn’t happen by accident.

Decades of incredibly foolish decisions have brought us to this point.

Meanwhile, bond markets in Europe are also starting to go nuts…

A sharp increase in borrowing costs also took place across Europe. France’s 10-year bond yield hit its highest level since 2009 on Tuesday, while the yield on German bunds climbed to 3.25pc, a 15-year high.

And the yield on 5 year Japanese bonds recently hit the highest level in 31 years.

Government bonds sit at the very foundation of the global financial system.

Now that foundation is really starting to be shaken, and that is an extremely troubling sign.

The stage has been set for a meltdown of epic proportions, and it won’t take very much at all to push us over the edge.

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

About the Author: Michael Snyder’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com.  He has also written nine other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”.  When you purchase any of Michael’s books you help to support the work that he is doing.  You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter.  Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites.  These are such troubled times, and people need hope.  John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.

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