The $39 trillion national debt could break the all-important U.S. bond market, sparking a ‘vicious’ emergency, former Treasury secretary warns |
The $39 trillion national debt could break the all-important U.S. bond market, sparking a ‘vicious’ emergency, former Treasury secretary warns
The U.S. is caught in a spiraling debt crisis, and a major casualty might be demand for U.S. Treasuries—a critical support pillar for the economy and the government’s ability to spend money.
The scale of U.S. borrowing is severely testing confidence in the country’s ability to keep financing itself. The federal debt has climbed to $39 trillion, a level that budget experts have warned might soon force the U.S. into increasingly dire decisions as to what it can spend on.
One victim of such a spiral would be the Treasury market, the largest bond market in the world. The country’s nagging debt problem is starting to break down that longstanding reliability of Treasury securities, and could eventually cause their demand to collapse, according to Henry Paulson, who served as Treasury secretary during the George W. Bush administration.
“That’s a dangerous thing,” he said Thursday during an........