A Trump administration official has sent the “clearest sign yet” that an economic crisis is on the horizon, and time is running out to avert a total meltdown, according to a new column.
Last week, the U.S. national debt hit $40 trillion, a mark that will raise borrowing costs and make it more expensive for Americans to buy goods such as cars, appliances, and food, according to some economists. The way that Treasury Secretary Scott Bessent has responded to the crisis has become a clear sign that they understand what’s at stake for the U.S. economy, Heather Stewart, economics editor at The Guardian, argued in a new column on Sunday.
However, she warned, it may be too late to stave off the national debt’s disastrous impact, she added. She pointed to Bessent’s move to double the Treasury’s buybacks of long-term U.S. government bondsas showing that anxiety about the U.S. bond market, which helps keep the economy moving, is at an all-time high.
“It was the clearest sign yet of anxiety in Washington about a sell-off that has pushed up yields on 30-year government bonds to levels last seen before the global financial crisis in 2008,” Stewart wrote, pointing to multiple “overlapping” reasons for the sell-off, such as inflation, the war against Iran, and U.S. investment in artificial intelligence.
“U.S. public debt has exploded in recent years, smashing through every forecast,” Stewart wrote. “It lurched higher after the financial crisis and took another leg up during the Covid pandemic. It has continued to surge in Donald Trump’s second term, as tax cuts have been unmatched either by tariff revenue – some of which is now being repaid – or by spending cuts from Elon Musk’s short-lived Department of Government Efficiency.”
“Without radical policy change, for which there seems little appetite on Capitol Hill, the independent Congressional Budget Office expects US government debt to rise from 100% of GDP today to 175% in 30 years’ time,” she added.
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