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Trump’s $5,000 pledge and the bond market revolt shows it's a voter bribe - costing every American $8,000
Fortune • • nation
Key Points:
- The U.S. government runs large annual deficits funded by issuing bonds, but rising bond yields signal market reluctance to buy more debt, contrasting with countries like Russia that face debt crises.
- President Trump’s proposal to issue $5,000 payments to every adult American has caused bond yields to spike to 30-year highs, increasing borrowing costs and risking a self-inflicted economic crisis.
- Funding Trump’s $1.2 trillion payout at current interest rates would cost taxpayers around $8,000 per person over ten years, effectively doubling the government's debt burden and highlighting the unsustainable nature of the plan.
- Treasury Secretary Scott Bessent’s efforts to stabilize bond markets through buybacks and shifting debt maturities have failed to curb rising yields, reflecting market skepticism about U.S. fiscal policy.
- While other countries face market discipline leading to spending restraint, Trump continues to propose massive new spending despite soaring borrowing costs, risking severe financial consequences reminiscent of past fiscal crises.
