America’s Credit Card Is Maxed Out

The 30-year Treasury yield now sits above 5.1 percent, having spiked to 5.18 in May, its highest level since 2007, on the eve of the financial crisis. Markets are no longer whispering about American fiscal credibility. They are shouting.

Consider the arithmetic. When yields last touched these heights, the US national debt stood at $8.35 trillion. Today it is nearly $39.5 trillion, almost five times larger, and growing by roughly four trillion dollars a year. This is not a country managing its finances. This is a country that is functionally bankrupt, living on its credit card and spending like drunken sailors on shore leave, except sailors eventually sober up.

America cannot afford these rates. And with inflation reaccelerating and the Fed tilting toward hikes rather than cuts, the rates coming next will be higher still. The bill always arrives.

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