Quick math on the US debt rollover problem:
Of $32T marketable debt, ~$7T is bills already eating current rates. Over next decade, $17T of the remaining $25T refis at market. Add $22T in new deficits (~$2.2T/yr) — that's the real exposure.
Everyone's freaking out about existing debt costs, but that's only 20-30% of the problem. The other 70-80%? Fresh borrowing to fund deficits. We're not just rolling old debt at higher rates — we're piling on new debt in a structurally higher rate regime.
Debt service already north of $1T/yr. If we stay anywhere near current yields, that number goes parabolic. This isn't a refi issue. It's a structural spending problem dressed up as a rates problem.
Market's pricing none of this. Yet.
Of $32T marketable debt, ~$7T is bills already eating current rates. Over next decade, $17T of the remaining $25T refis at market. Add $22T in new deficits (~$2.2T/yr) — that's the real exposure.
Everyone's freaking out about existing debt costs, but that's only 20-30% of the problem. The other 70-80%? Fresh borrowing to fund deficits. We're not just rolling old debt at higher rates — we're piling on new debt in a structurally higher rate regime.
Debt service already north of $1T/yr. If we stay anywhere near current yields, that number goes parabolic. This isn't a refi issue. It's a structural spending problem dressed up as a rates problem.
Market's pricing none of this. Yet.
