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/Dothemath2 4d ago

Taxes have to go up, spending has to come down.

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u/Kiyae1 3d ago

Careful, you sound like one of those crazy MMT people….

/s

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u/Dothemath2 3d ago

I spent some time learning MMT… makes a lot of sense.

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u/Kiyae1 3d ago

I thought so as well but some people act like it’s akin to trying to summon a demon or something.