U.S. total public debt crossed $40 trillion for the first time this month, with debt held by the public projected to reach $32.3 trillion, or 100.5% of GDP, compared to just 34.7% in fiscal 2000. Strategists at J.P. Morgan Asset Management and Apollo attribute the surge to four compounding factors since 1996: tax cuts (-$11.1 trillion), Middle East wars (+$3.9 trillion), aging demographics driving up entitlement spending (+$12.5 trillion), and crisis-response spending (+$5.2 trillion). Hedge fund legend Stanley Druckenmiller published an op-ed in the Wall Street Journal calling the long-term Treasury yield « the only fiscal disciplinarian the U.S. has left, » criticizing the Treasury’s decision to double long-dated bond buybacks. The Office of Management and Budget projects deficits near 5% of GDP, while the Congressional Budget Office forecasts debt climbing toward 175% of GDP.
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