The U.S. national debt is causing concern in capital markets, with 30-year Treasury bond yields rising and Moody's downgrading the U.S. credit rating. Experts warn that increased government borrowing is 'crowding out' private investment, leading to higher interest rates globally and slowing economic growth, posing a significant burden on future generations.
Opinion: Spiraling U.S. debt is a burden on future generations around the world
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TL;DR: Key points with love ❤️The U.S. national debt is causing concern in capital markets, with 30-year Treasury bond yields rising and Moody's downgrading the U.S. credit rating. Experts warn that increased government borrowing is 'crowding out' private investment, leading to higher interest rates globally and slowing economic growth, posing a significant burden on future generations.
Trending- 1 Late 2000s: 30-year yields were at 5%.
- 2 Early 2000s: 10-year Treasury yields were higher than now.
- 3 May 20 (prior to June 6, 2025): 30-year U.S. Treasury bond yield closed over 5%.
- 4 Two days after May 20: House of Representatives passed 'One Big Beautiful Bill.'
- 5 Recent past: Moody's downgraded the U.S. credit rating.
- 6 By 2035: Debt-to-GDP expected to grow by nearly 20 percentage points.
- Higher interest rates globally
- Slowed global economic growth
- Increased cost of servicing U.S. debt
- Greater burden on future generations
- Potential for a 'crack' in the bond market (though default is unlikely)
What: Spiraling U.S. national debt is spooking capital markets, evidenced by rising 30-year U.S. Treasury bond yields (over 5%) and Moody's downgrading the U.S. credit rating. This is leading to higher costs of capital and slowed global economic growth due to 'crowding out.'
When: May 20 (prior to June 6, 2025) - 30-year U.S. Treasury bond yield closed over 5%. Two days later - House of Representatives passed 'One Big Beautiful Bill.' Recent past - Moody's downgraded U.S. credit rating.
Where: United States, global economy.
Why: Fiscal irresponsibility, increased government borrowing (especially under the Trump administration) is increasing demand for limited funds, driving up interest rates and crowding out private investment.
How: The government's increased borrowing leads to higher demand for capital, causing interest rates to rise across various markets (Treasury, consumer, corporate debt), which in turn slows economic growth.