The GOP’s spending bill isn’t quite yet ready for a vote. However, based on the current proposals, total debt could increase from $3.3 trillion to $5.2 trillion.
That may be why Moody’s finally joined the other credit rating agencies in downgrading U.S. debt.
And it may be adding fuel to the bond market fire, with the 30-year Treasury yield topping 5%.
Despite tough talk on getting government spending down, and the billions of dollars in wasteful spending identified by DOGE, none of that matters if actual spending rises.
This doesn’t mean a debt crisis overnight. Just like the global shift away from the U.S. dollar, there’s no singular event that historians will be able to identify.
Instead, it’s more like a death by a thousand cuts. The business-as-usual spending out of Washington while the bond market screams that a fix is needed is simply the most recent cut.
-Andrew
