RECORD $100B in T-Bills Issued as U.S. Debt Crisis Turns Desperate
Define Desperate
The US is desperate for cash. Anyone ever consider that is why DOGE laid off so many people and why Trump is slapping huge tariffs on everyone? Now this, let me explain briefly.
As the US credit worthiness declined countries were no longer willing to buy the 20 year debt, then they stopped buying the 10 year debt and they moved to 2 year debt. The problem is that the amount of debt maturing each year is growing exponentially because of this. If you were selling 20 year debt you need to roll over 5% each year. If you are selling 10 year that doubles to 10% each year. When they moved to 2 year that is 50% each year. At the same time that the percent of debt needs to be rolled over each year the amount of overall debt has grown tremendously.
In 1975 total debt was 533 billion. If we were selling 20 year Tbills that would be about 27 billion that would get rolled over. In 2005 total debt was just about $8 trillion. If we were selling ten year T bills we needed to roll over 800 billion. In 2025 we owe $36 trillion and if we have to roll over half of that then that is $18 trillion
Amount of debt to be rolled over
In Billions
1975 -- 27
2005 -- 800
2025 -- 18,000
But it gets worse
It used to be that China and Japan were big purchasers of US debt. Not anymore, they are sellers. So not only do we need to roll over 18 trillion, we are competing with other countries who are selling US debt that they bought. In fact half of the world is switching to BRICS so many countries are selling US debt.
And that is not all
So yes, we are competing with other countries that are also selling US debt, but at the same time we have fewer and fewer customers who will actually buy US debt.