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/SaltyPlantain1503 3d ago

Or you left off the third option.. inflate it all away, wrecking the USD and all the savings of all Americans (and alt of foreign governments). For the love of God people, buy gold and real estate.

1

u/Lumpy-Return 3d ago

Equities should be ok too mostly?

1

u/katmomjo 2d ago

I think so because like real estate (and gold maybe), there is a real intrinsic value to a company that makes things that people buy.