In an attempt to feed the soaring debt and spending habits of the United States government, the US Treasury is issuing more bonds. But they’ve run into a big problem: no one wants to buy those worthless bonds anymore.
Debt is going to be a big problem for the United States government sooner rather than later. Rising interest rates will eventually push the government’s interest bill higher than that of their military bill (which is astonishing, quite honestly.)
The new debt will be issued in a three-year, 10-year, and 30-year bond supply this week, Reuters reported, quoting US Treasury data. In late September, the Treasury sold a combined $106 billion of debt amid cooling demand from investors. With countries like Japan, China, Russia, and Turkey buying less and selling more US debt, foreign purchases at Treasury auctions have slowed down. Bond dealers have been buying more US debt, but they quickly resell it to make a profit.
There are concerns that US debt is growing out of control. According to RT, America’s debt currently stands at $21.5 trillion, while the Treasury said the US government paid $523 billion in interest in the fiscal year 2018, the highest ever on record. According to the US president Donald Trump’s chief economist Kevin Hassett, the president intends to announce a policy aimed at tackling the debt. “The deficit is absolutely higher than anyone would like. As you watch our next budget come out – and you’ll start to see things in the next few weeks – then you’ll see a much more aggressive stance” in tackling it, he said, as quoted by Bloomberg. But no one is holding their breath.
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