America is faced with a crisis, as the national debt just passed $40 Trillion, and no end in sight, as Donald Trump adds massively to the national debt with his extremely large tax cuts, and the costs of the Iran War.
This presents a crisis for the funding of Social Security and Medicare, which will be unable, as things stand now, to pay out to recipients the entire amount they are due on a monthly basis by the mid 2030s, and on health care costs.
The national debt reached $1 Trillion under Ronald Reagan by his second year in office, 1982.
And when one looks at all Presidents since then, it is clear that the national debt has magnified primarily under Republican Presidents since Reagan, who tripled the national debt to $3 Trillion, as well as George W. Bush, and Donald Trump.
George W. Bush started with a $5.7 Trillion national debt, and left eight years later, with $10.6 Trillion, so a doubling of the national debt.
Donald Trump started with about $20 Trillion national debt, and left after four years with $28 Trillion national debt. And in his second term, the national debt has grown from $36 Trillion up to, presently, $40 Trillion national debt.
So $20 Trillion, half the total national debt at present, but with about $3 Trillion being added annually by estimate for the next two and a half years of Trump, are due to Republican policies, including more massive tax cuts for the wealthy under Bush and Trump, and involvement in foreign wars in Iraq, Afghanistan, and now Iran.
This is not excusing Democratic Presidents since Reagan, but the worst economic downturn, the Great Recession, since the Great Depression, explains Barack Obama adding $9.3 Trillion to the national debt in two terms; and Joe Biden, with the COVID 19 Pandemic, adding $8.5 Trillion to the national debt in his one term of office.
Bill Clinton added only $1.5 Trillion to the national debt in his two terms, and actually had balanced budgets in his second term, in league with a Republican Congress, while Republican George H. W. Bush in his one term added $1.3 Trillion to the national debt.
By comparison, Democrat Jimmy Carter in his one term only added $300 Billion to the National Debt.
With the U.S. national debt surpassing the $40 trillion milestone, it directly affects the economy by driving up borrowing costs for consumers and businesses, accelerating federal interest expenses, and restricting long-term economic growth. When the federal government borrows heavily, it introduces massive structural pressures that ripple through interest rates, inflation, public programs, and private investments.
When I was in the Navy, the year after I left Argentina, they had a 1000% inflation rate from all of the debt accumulated by their Military Junta.
To put this into perspective, if a loaf of bread cost you $1.00 in January, by December it would cost you $10.00.
There is a big bond sell off happening right now!
The massive sell-off in the bond market—which has pushed 30-year Treasury yields to a peak of 5.337%—is being driven by a convergence of surpassing the $40 trillion national debt milestone, renewed inflation fears linked to the war with Iran, and aggressive corporate debt competition from Big Tech companies. Because bond prices and yields move in opposite directions, investors are dumping existing fixed-income assets and demanding much higher interest rates to compensate for the escalating risks of holding long-term U.S. government debt.The U.S. bond market is experiencing a severe macro stress test as the federal debt eclipses the size of the U.S. economy, forcing annual interest expenses past $1.2 trillion. This structural fiscal pressure is compounded by geopolitical instability and private sector demand for capital.