The hottest Public Debt Substack posts right now

Large government borrowing can contribute to higher inflation when monetary policy accommodates it, so deficits and fiscal policy matter for price stability.
If AI makes answers effortless, people may lose the incentive to learn and the shared stock of general knowledge could shrink, though AI’s errors might occasionally produce new discoveries.
Blocking key shipping chokepoints like the Strait of Hormuz pushes up oil and commodity prices, raising inflation and damaging oil‑using industries even as some producers profit.

A very large, concentrated holder of Bitcoin could be forced to sell if prices fall to its average cost, and such selling could trigger a damaging price spiral and liquidity crunch.
The biggest long-term drop in women’s unpaid housework came from moving cooking into the market, and physical attractiveness also yields measurable advantages in pay and workplace evaluations.
High and rising public debt could undermine investor confidence and a spike in interest rates might cascade into a broad financial crisis, but rapid GDP gains from transformative technologies could make today’s debt seem trivial even as they disrupt the labor market and reduce participation.

The US has a very high level of public debt, but the situation is not as hopeless as it sounds. There's still a lot of flexibility in managing this debt.
Experts suggest the US might be in a state of 'fiscal dominance,' meaning traditional monetary policies might not work effectively anymore. This makes managing the economy tricky.
The current administration has experience with managing debt and can take steps to improve the financial situation. The President has options to deal with the debt and is not completely stuck.

When fiscal consolidation is credible and the central bank supports demand while technology cuts the price of capital, private investment can be crowded in and overall growth can accelerate.
The 1994 bond-market selloff reflected unexpectedly strong tech-led growth and mortgage-backed‑security duration effects, not a market fear that deficit cuts would wreck the recovery.
The 1993 deficit‑reduction package paired tax increases with spending caps and expanded the EITC, which helped working families and long‑run growth, while much of the political opposition was partisan theater rather than a unanimous professional economic judgment.

The government has sharply increased borrowing, adding hundreds of billions in a few months and sustaining a new norm of over $2 trillion per year; at that pace the debt could grow by about $10 trillion every four years.
Annual interest payments have topped $1 trillion and are set to rise, driven by large amounts of notes (2–10 year maturities) and a shorter average debt maturity that forces more frequent rollovers.
This combination of rising debt and interest costs looks fiscally unsustainable and could force the Fed or Treasury into interventions that would weaken confidence and strain markets.

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AI needs far more capital and compute than traditional markets can easily provide, creating a trillion-dollar financing gap to build the necessary infrastructure.
Stablecoins and tokenized dollar channels are positioned to fill that gap by minting dollar liquidity, buying Treasuries and other dollar assets, and enabling real-time, algorithmic settlement for machine-driven markets.
That shift concentrates huge financial power in stablecoin issuers and ties national security to their health, raising systemic risks if trust or liquidity falters while also reinforcing dollar hegemony and greater state involvement in underwriting compute infrastructure.

China recently issued its first US dollar sovereign bonds in Saudi Arabia, which was very successful and attracted lots of international interest. This shows that global investors trust China's creditworthiness.
There has been some exaggerated talk on social media claiming this bond issuance is a big blow to the US dollar. However, these claims are misleading and don't reflect the usual practice of governments issuing bonds in various currencies.
Wang Yongli, a financial expert, emphasized that the bond issuance does not aim to disrupt the US currency or its economy. It's more about China's normal efforts to raise funds in international markets.

The U.S. government needs to cut $2 trillion from its budget to avoid financial disaster. This is important for maintaining democracy and economic health.
To save this money, we can eliminate wasteful agencies, cut unnecessary spending, and reduce low-priority programs. It’s crucial to make these cuts soon to prevent further debt growth.
The proposed savings can be grouped into three main areas: cutting unnecessary bureaucracies, downsizing defense spending, and reducing entitlement programs. Each area has specific targets for savings.

The Federal Reserve is spending more money than it is earning, leading to significant losses. This means they can't send money back to the Treasury, which affects taxpayers.
The Fed's unusual accounting strategy allows them to classify these losses in a way that keeps them operating. This raises questions about how they can sustain this approach in the long term.
People are concerned about the impact of the Fed's spending on inflation and government debt. Many wonder how this will affect the economy and taxpayers in the future.