Trump calls for using "the military to solve the U.S. debt problem"—don’t treat it like a joke, okay!
┈➤Trump is answering a hypothetical question
A reporter interviews him about the U.S. debt issue. First, Trump expresses trust in the Treasury Secretary.
Then the reporter asks what happens if U.S. debt yields rise again. In fact, this is a hypothetical question, because the accelerated purchases of long-term Treasuries proposed by Bessent are not set to begin until September 9, so it’s impossible to determine whether the policy will be effective.
And when faced with this hypothetical question, Trump says "use the military to solve it."
┈➤Not funny at all
Trump isn’t the Treasury Secretary—he’s the president, and he’s considering the bigger picture.
There are three reasons why long-term Treasury yields rise:
First, the scale of U.S. debt expansion has been too fast, which affects market confidence and expectations for U.S. Treasuries.
Second, the market’s expectations for long-term inflation in the U.S. dollar. If the dollar is expected to weaken over the long term, the expected value of long-term Treasuries also declines.
Third, the tug-of-war between the U.S. and Iran has been going on for half a year and still hasn’t been resolved. As a result, market confidence in America’s military—or broader—capability weakens, which also affects the dollar and U.S. Treasuries. (Remember back on January 3, when the U.S. directly took away Venezuela’s then president? As the U.S. dollar index rose and U.S. Treasuries rose, the most obvious increase was the USD-to-CNY exchange rate.)
The first reason is from a fiscal perspective. The second reason is essentially oil prices, which brings things back to U.S.-Iran relations—so the last two reasons, in essence, could be the same issue.
In his answer, Trump assumes that everyone—including the reporter—knows that America’s military and international influence, as well as U.S.-Iran and Strait issues, affect the dollar and U.S. Treasuries. Besides, the reporter’s question premise is: what if fiscal tools don’t work? Then of course it would be military strength.
┈➤Even a bit frightening
In the end, Trump said, "If it’s necessary to use military force, we will definitely use it."
If the U.S. were truly to launch a ground invasion of Iran, that would not be good news. Back when the U.S. invaded Iraq, it took 43 days, but Iran’s land area is nearly four times that of Iraq. Add Iran’s drones, naval mines, and so on, and this could very well turn into a long conflict.
In short, one of the main reasons behind the U.S. debt problem is Iran, and one extreme way to address the U.S.-Iran problem is military action. Trump’s response isn’t just not funny—it could also be a bit frightening.
Of course, it’s possible Trump might have ways to deal with it that don’t involve military force. But how would he tell the reporter that?
┈➤Trump is answering a hypothetical question
A reporter interviews him about the U.S. debt issue. First, Trump expresses trust in the Treasury Secretary.
Then the reporter asks what happens if U.S. debt yields rise again. In fact, this is a hypothetical question, because the accelerated purchases of long-term Treasuries proposed by Bessent are not set to begin until September 9, so it’s impossible to determine whether the policy will be effective.
And when faced with this hypothetical question, Trump says "use the military to solve it."
┈➤Not funny at all
Trump isn’t the Treasury Secretary—he’s the president, and he’s considering the bigger picture.
There are three reasons why long-term Treasury yields rise:
First, the scale of U.S. debt expansion has been too fast, which affects market confidence and expectations for U.S. Treasuries.
Second, the market’s expectations for long-term inflation in the U.S. dollar. If the dollar is expected to weaken over the long term, the expected value of long-term Treasuries also declines.
Third, the tug-of-war between the U.S. and Iran has been going on for half a year and still hasn’t been resolved. As a result, market confidence in America’s military—or broader—capability weakens, which also affects the dollar and U.S. Treasuries. (Remember back on January 3, when the U.S. directly took away Venezuela’s then president? As the U.S. dollar index rose and U.S. Treasuries rose, the most obvious increase was the USD-to-CNY exchange rate.)
The first reason is from a fiscal perspective. The second reason is essentially oil prices, which brings things back to U.S.-Iran relations—so the last two reasons, in essence, could be the same issue.
In his answer, Trump assumes that everyone—including the reporter—knows that America’s military and international influence, as well as U.S.-Iran and Strait issues, affect the dollar and U.S. Treasuries. Besides, the reporter’s question premise is: what if fiscal tools don’t work? Then of course it would be military strength.
┈➤Even a bit frightening
In the end, Trump said, "If it’s necessary to use military force, we will definitely use it."
If the U.S. were truly to launch a ground invasion of Iran, that would not be good news. Back when the U.S. invaded Iraq, it took 43 days, but Iran’s land area is nearly four times that of Iraq. Add Iran’s drones, naval mines, and so on, and this could very well turn into a long conflict.
In short, one of the main reasons behind the U.S. debt problem is Iran, and one extreme way to address the U.S.-Iran problem is military action. Trump’s response isn’t just not funny—it could also be a bit frightening.
Of course, it’s possible Trump might have ways to deal with it that don’t involve military force. But how would he tell the reporter that?
