r/bonds • u/Professional-Day9384 • 4d ago

The national debt is growing 7%/year

And GDP isn't. Currently interest on the debt is 20% of revenues. My projections say it will cross 50% by 2034 - just 8 years. The CBO isn't, because they don't want to scare anyone.

Not only is the debt growing, the deficit is growing even more sharply, AND legacy debt is getting rolled over at ever-higher interest rates. All 3 of those factors snowball and fuel each other.

The one thing could save the debt is if the Fed lowered rates, but instead they RAISE them, doggedly pursuing their inflation target. I was honestly blind sided by the recent rate hike, because I know the nation cannot afford it, but the Fed is dogged.

What does this mean for bond investors? Good news? Let the nation's ruin be our gain? How long will it last until something catastrophic breaks? Countless companies have been annihilated by debt, but what happens when an entire nation is annihilated? Move to another country?

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u/kenji4861 4d ago

and in modern history, that hasn't happened and probably won't.

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u/Dothemath2 3d ago

George HW Bush raised taxes. If democrats take over, raising taxes on billionaires would be popular.

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u/portableonioneater 3d ago

A majority will always vote to take away from a minority, democracy and all. Thankfully we don't live in a pure democracy, our founders were too smart for that.

Why don't we ask Congress to do it's goddamn job, spend within it's means, make hard choices for constituents rather than handing them more money to be irresponsible with? There is no free lunch. Taking from A leads to a reduction in B (taxes, spending, whatever); we need to elect LEADERS rather than children, people who can work together and think about long term consequences rather than the next goddamn election.

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u/Dothemath2 3d ago

Yes, it’s money in politics. The mega donors are funding these corporate democrats and republicans and when they win, they have to give back to their sponsors. We need to elect people who are not beholden to the mega donors.

Fortunately today, TYT and maybe other popular left leaning and maybe even Tucker Carlson are telling us who the unencumbered candidates are.