TL;DR

The US government’s massive debt is spiraling out of control due to rising interest rates. This threatens to trigger a financial crisis, impacting everyone, from taxpayers to global markets. It’s a grim scenario, repeating mistakes of the past.

Story

The US is broke. Or at least, it’s spending far more than it earns, accumulating a mountain of debt. This isn’t some new problem; governments have always played this game, but the stakes are higher now. Think of it as a house of cards built on cheap credit.

How did we get here? Decades of deficit spending, fueled by low interest rates, encouraged borrowing. It was easy money, making it seem like the party would never end. But the bill is coming due. Treasury yields—the interest rates on US government bonds—are rising. This is bad news.

Why? Because the US government needs to borrow trillions of dollars every year to stay afloat. Higher yields mean higher interest payments, making the debt even bigger. It’s a vicious cycle, a self-fulfilling prophecy. It’s like the interest on your credit card bills spiraling out of control. Pretty soon, those payments are the biggest expense you have, and you can’t get caught up.

Who gets hurt? Everyone. Higher interest payments mean less money for vital government programs. Taxpayers will bear the brunt of the increased burden. Inflation will likely rise as the government resorts to printing more money to keep up. It’s a classic case of shifting the cost to everyone else, to avoid admitting the problem.

What can you do? Sadly, not much. The scale of the problem is immense. You can only focus on your own finances. Reduce your debt, save money, and be prepared for hard times. Diversify investments to protect against economic turmoil. It’s more important than ever to be financially literate.

History teaches us that ignoring these problems doesn’t make them disappear. Remember 2008? The subprime mortgage crisis? It wasn’t caused by aliens, it was years of unchecked growth and reckless lending. This time it’s not just housing; it’s the entire US economy. The parallels are chilling.

The conclusion? The US government’s financial predicament is dire. It’s not a matter of if something will happen but when and how bad it will get. There’s no easy fix, and the longer we wait, the worse it will get. This isn’t about party lines—it’s about sound financial principles and understanding the fundamentals of debt and money. Ignoring it won’t help us avoid its consequences.

Advice

Reduce your debt, diversify your investments, and prepare for economic uncertainty. Financial literacy is more important than ever.

Source

https://www.reddit.com/r/wallstreetbets/comments/1l98vo9/treasury_yield_crossing_5_what_are_the/