As “alarm bells” continue to “ring” as Our National Debt now surpassing $40 Trillion Dollars is being addressed, Scott Bissent Treasury Secretary announced on August 19th that the U.S. Treasury will double its long-term bond buyback operations to at least $4 billion per operation beginning on September 9th to help lower surging borrowing costs on its longer-term Treasuries and plans by agency-organization-”think tanks” to lower our budget and increase our tax-based revenue are waiting to be heard as well and need to be addressed and implemented by Congress.
With this mind, “Maya MacGuineas President for the Committee for a Responsible Federal Budget recently appeared on Bloomberg News to discuss a wide range of fiscal topics – the crossing of a $40 Trillion Dollar National Debt; the implications of high and rising deficits on our economy, interest rates, and bond yields; the need to address all areas of the federal budget, including ailing trust funds [such as Social Security]; and how lowering deficits is the “single most important thing” policymakers can do to address affordability concerns.”
“Maya MacGuineas, president of the budget watchdogs at the Committee for a Responsible Federal Budget, foresaw this latest milestone in an earlier statement, noting that government overspending in July alone had set a pace of $14 billion in new debt every single day.”
Further stating, “We are already feeling the consequences of this extreme borrowing — high interest rates, trillion-dollar interest payments, and looming trust fund insolvency that threatens benefits for Social Security and Medicare,” MacGuineas wrote as she called for lawmakers to try to find a way to reduce [budget] deficits to 3% of GDP. (That figure currently stands at 5.8%.)”
NOW WHAT THIS ARTICLE IS CONCERNED ABOUT>>
When we are finally getting a plan before Congress and passed or even before that where, if or when, Foreign Governments and a sufficient number of other investors, for whatever reason (such as the friction Trump has created with Canada and many of our other trading partners causing them to start and/or increase their trading with China thereby minimizing their financial ties with us which could very well include the LESSENING of buying U.S. Treasuries) and as a result, they then, let’s say, dramatically “cut down” on Treasury bond purchases from us (or in some cases “God-forbid”, stopped buying our bonds all together), hence, causing The Treasury to have to (drastically) raise yield rates to attract enough buyers “to fill the void” causing Treasury debt servicing costs to “shoot up” and if that wasn’t enough, that if we got to the point where to attract the necessary purchasers to maintain adequate funding for The Treasury to conduct “business”, The Fed THEN had to START PRINTING MONEY JUST TO PAY OUR BILLS thereby causing The Dollar to de-value as well creating further additional “panic” amongst Foreign Governments and other investors causing them to question whether to purchase additional Treasuries (or any at all)–we would be “in a world of hurt” and frankly at that point, it “would be ALMOST too late” to do “anything about it” as “the dam (figuratively) would have already burst”!!!!! So, to best protect ourselves, it would be best to, “to say the least”, have some kind of preventative measures in place, should “the worst happen”!!
Now, as an aside, let it be noted, The Fed has printed money (called Quantitative Easing) in national emergencies such as The Banking Crisis of 2007 and the Covid Pandemic. Remember all those stimulus checks many people received? That was being generated by The Fed printing money!!
Now to address what this article is concerned about, may I direct your attention to Trump’s April 2nd, 2025 Liberation Day multi-nation tariffs when, on the same day, the stock market crashed and China and Japan, our biggest foreign government bondholders, threatened to dump their Treasury bonds, causing Treasury yields to “shoot up” while stocks plummeted with Moody’s dropping their Triple-A (AAA) rating for the U.S. to a Double-A (AA) rating reflecting loss of confidence in the Dollar!!!
On that day, the U.S. gross national debt was approximately $36.2 trillion and 10 years before our Debt was only $20 trillionand now a little over a year later, Our National Debt is surpassing $40 Trillion with “no end in sight” and the potential problematic issue we now face as a nation is that investors and IN PARTICULAR FOREIGN GOVERNMENTS could STOP (or dramatically cut-down on) BUYING OUR TREASURY BONDS thereby NOT continuing to help fund Our National Debt. This all happening before The Committee for a Responsible Federal Budget or other “think-tank” agency-organizations can get Congress to do “what needs to be done.”
For example, “Foreign investors own about 24% to 32% of total U.S. government debt, depending on whether the share is calculated out of total outstanding public debt or strictly debt held by the public. This translates to roughly $9.1 trillion to $9.35 trillion.”
Which brings us to the “crux of the matter” —Is there anything we can do to prevent The Treasury from running out of money and not be able to cover current expenses and payouts on maturing Treasury debt becoming due and owing (and not being renewed) and even more importantly keeping The Dollar from losing its status as The World’s Reserve Currency while the problems of Our Economy are being addressed??
Now, one way “to fill the void left by disenchanted governments” because of China’s and Japan’s (our two biggest bondholders) threat to sell their Treasuries and now because of Trump’s continuing treatment of our trading partners and to prevent a potential WHOLESALE bond sales threat by a collective of foreign nations should such ever materialize would be Stablecoins which are cryptocurrencies backed by short-term U.S. Treasuries. Total stablecoin market capitalization reached $308.0 billion as of August 13, 2026.” Projections suggest Stablecoin use could be as much as $2.8 trillion by 2028 with a further projection of $5 trillion by 2035. Treasury Secretary Scott Bissent also asserts, “stablecoins are a strategic tool to ‘lock in dollar supremacy’.”
However, in lieu of our present budget overruns and annual deficit of $1.9 trillion for this year and projected to increase to a whopping $3.1 trillion by the year 2036 per calculations by the CBO (Congressional Budget Office), we would need a cumulative $23.1 trillion over the next 10-year period from 2026 through 2035 to counteract these continuing annual budget overruns and Treasury debt servicing costs. THIS with Annual deficits growing from $1.9 trillion to roughly $2.5 to $2.7 trillion per year by 2035. Far less than the $5 trillion cumulative total by 2035 that Stablecoin reserve funds (which, as stated, are backed by short-term U.S. Treasuries) COULD EVER PROVIDE compared to this cumulative $23.1 trillion total over the 10-year period from 2026 through 2035!!!
NOW, HERE’S THIS ARTICLE’S IDEA & PROPOSAL>>>
Another way “to fill the void left by disenchanted governments” should Stablecoin use not be enough (by itself) AND to better keep up with our expanding National Debt would be to require domestic importers to purchase U.S. Treasuries with a certain percentage (say 10 to maybe even 15 percent) of their sales when importing goods here–therefore, in essence, creating a NEW 3rd class of U.S. Treasury purchasers!!
To give an idea of how much we import—”The United States imported approximately $388 billion in goods and services in June, 2026 down slightly from $395 billion in May, with total annual goods imports running over $3.3 trillion per year according to official U.S. Customs and Border Protection Trade Statistics.”
Now say with 10 to 15 percent of their sales when importing goods become devoted to bond PURCHASES this would amount to roughly $330 Billion to $495 Billion per year!!!! With this $330 Billion to $495 Billion per year in bond purchases amounting to a cumulative estimated total of $3.30 Trillion to $4.95 Trillion in bond PURCHASES over the next 10 years by our domestic importers which (1) could be kept and collect Treasury bond yields or (2) better yet, they could “turn around” and re-sell these bonds on the open secondary bond market to institutional bond buyers most of whom routinely attend Treasury Bond Auctions and sell these bonds for say 90% for what they originally paid to obtain these bonds and re-investing this money back into their business and make a more reasonable and substantial profit!!! This would be the more probable outcome of what our domestic importers would do with their mandatorily purchased bonds. More on this later.
Now, some background information:
As it stands now, there are two (2) main groups of bond purchasers–domestic institutional investors such as banks, retirement-pension funds and insurance companies, with the second class of large-scale bond purchasers being foreign governments. But because of their present concern over our rising National Debt, they are now buying less and are also investing more in developing their own country’s infrastructure and economy and that of their trading partners. A prime example being China’s Belt and Road Initiative.
But with a large-scale third class of U.S. Bond purchasers also being required to be a MANDATORY class of purchasers, this would stabilize the U.S. Bond Market giving “guaranteed” relief and confidence to domestic institutional investors and foreign governments AS WELL! This way, there would always be, as a result of this New 3rd class of bond buyers, the required minimum of cash reserves The Treasury would need to make scheduled payments and for current government expenditures coming due. This, alone, would stabilize the bond market and act as a “hedge” against (AND ALLAY) any fears causing large scale selloffs or future non-purchases of U.S. Treasuries by foreign governments or domestic investors fearing a loss of value to their investment!!
Also, with this New 3rd class of bond buyers and this is VERY IMPORTANT, this would STABILIZE our Bond market, that is, making the Treasury less dependent on their bond auctions not having to sell as many Treasuries, otherwise not “being put in a position” to sell at higher yield rates to meet their needed quota thereby saving on debt servicing costs!!! Just to give an example, our debt servicing costs on outstanding bonds this year was a trillion dollars!! Fortune Magazine reports that 19 percent of our National Budget, as of now, is spent on Our Debt and If the Treasury was forced to pay higher yields, debt servicing costs could soar to over 2 trillion per year!! And if interest rates ever climbed to 18-20 percent as they did in the days of Carter, we could be looking at $3-4 trillion per year in debt servicing costs!!!
And with The Supreme Court’s recent ruling on Trump’s reciprocal (Liberation Day) tariffs as being unconstitutional in that it’s actually a tax and therefore solely within purview of Congress, The Court struck down Trump’s authority to impose tariffs through the International Emergency Economic Powers Act (IEEPA). except for limited exceptions under Sections 232, 301 and 122.
The Court also ordered Trump to refund $166 Billion to those importers who paid these reciprocal (Liberation Day) tariffs. Now if Congress does not make these proposed bond purchases mandatory for domestic importers, and The Executive Branch starts requiring importers to now buy Treasuries instead of tariffs, wouldn’t the cost of these bond purchases that could be potentially “passed on” to the consumer also be a “tax” and therefore unconstitutional??
Before we answer this question, obviously, the best way to handle our growing National Debt is to simply balance our budget and NOT spend more than what we take in!! But because of the many things we must do to protect society, one’s health and safety, to regulate business and prevent fraud and provide for defense on land, sea and air and now in space, “balancing the budget” would be extremely difficult!! Fortunately, all advanced industrialized G7 nations have national debts that are more than what they make. Though our debt to GDP ratio is currently at 122.9 percent. Some nations are even higher with Japan currently at 207.4 percent being as high as 237 percent!!
Fact is, it simply takes more to adequately protect and police a society than what we collect in taxes and, as a result, bonds must be issued in the form of debt to do everything that must be done!! But can we AT LEAST get our budget deficits down to 3% of GDP as suggested by Committee President “MacGuineas [who] wrote as she called for lawmakers to try to find a way to reduce deficits to 3% of GDP. (That figure [which] currently stands at 5.8%.)”—THAT WOULD BE GREAT!!!!
Now, getting back to our question, if (domestic) importers were required to purchase bonds instead of tariffs, wouldn’t that still amount to a tax? Fact is institutional commercial bond buyers would be extremely interested in “relieving” these domestic importers of their bonds and the bidding amongst them would hence be very competitive and probably go up to as high as 90 or even to 95 cents (“on the dollar.”)
But wouldn’t someone just offer, say, 50 cents “on the dollar”? Well, let’s say that’s true! But then again, someone else would then offer 60 cents “on the dollar”, then another 70 cents, then yet still another, 80 cents “on the dollar” and still make a profit!! But couldn’t these major institutional bond-buyers get together and agree to offer domestic importers say only 60 to 65 to 75 cents “on the dollar”? That would be patently against the FTC’s (Federal Trade Commission’s) anti-trust, anti-competitive laws that have “been on the books” for years which prevent “price-fixing.” That is, sellers industry-wide can’t “gang-up” and agree to all sell at a “fixed” high price nor can (they as) potential buyers “get together” and only offer to buy at lower than fair market prices.
With this in mind, having a free-market (bidding) system, basically the bidding would probably go up to as high as 90 to 95 cents (“on the dollar”) as such domestic importers would also be buying imported goods several times a year thereby also buying Treasuries multiple times a year with these institutional commercial bond purchasers (further) seeing that even at 90 to 95 cents, a reasonable profit could still be made.
But even at this relatively minor 5-10 percent loss of say the 10 to 15 percent levy on what they pay for their imported goods therefore amounting to 5-10 percent of 10 to 15 percent of what they pay for these goods equaling a half percent to one and a half percent of the total sales costs to the domestic importer, admittedly a relatively miniscule amount, wouldn’t that still, in some way, be a “tax” that the importer could then theoretically “pass-on” to the consumer?
Well, if Congress enacts a law that requires domestic importers to buy Treasuries but doesn’t require these importers to absorb the costs of buying Treasuries, these costs could be “passed-on” or the government could reimburse our domestic importers with cash so there is no potential pass-thru loss to the consumer or better yet reimburse them with Stablecoin which then could be used by our domestic importers to pay their foreign importer-shippers and/or manufacturers which would be redistributed throughout the world further stabilizing our bond market and help keep our Dollar as The World’s Reserve Currency!!!
And in conclusion, just to be “on the safe side”, in case Stablecoin use is not enough to keep up with our expanding National Debt as Congress hopefully will enact a more balanced budget, additionally requiring domestic importers to purchase bonds, in the meantime, would solve the problem of making sure the Treasury, pending legislation by Congress to address our budgetary concerns, that we (the Treasury) always has enough funds “on hand” “at all times” to (1) fully finance our budget, (2) any of its cost overruns and (3) the debt servicing costs on outstanding Debt!! And until the necessary legislation by Congress reflecting the work of organizations such as The Committee for a Responsible Federal Budget are adopted and made LAW!!!
