DEAR MRS. MACGUINEAS
I thoroughly enjoyed your recent appearance and discussion on Bloomberg regarding your Plan and what we need to do regarding Our National Debt now just surpassing the $40 Trillion Dollar mark!!
What I’m concerned about is–when we are finally getting Your Plan before Congress and passed or even before that where if or when such should ever occur where Foreign Governments and a sufficient number of other investors, for whatever reason, stopped buying bonds or dramatically “cut down” on purchases from us, hence, causing The Treasury to have to (drastically) raise yield rates to attract enough buyers “to fill the void” causing Treasury bond debt servicing costs to “shoot up” and “God-forbid” if that wasn’t enough, that to attract the necessary purchasers to maintain adequate funding for The Treasury to conduct “business”, The Fed THEN had to print money thereby causing The Dollar to de-value as well creating further “panic” amongst Foreign Governments and other investors questioning as to whether to purchase additional Treasuries (or any at all in the future)–we would be “in a world of hurt” and frankly at that point, I think, it “would be ALMOST too late” to do “anything about it” as “the dam (figuratively) would have already burst”!!!!!
To give an example of what I’m talking about, may I direct your attention to Trump’s April 2nd, 2925 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—the exact opposite of what one would expect when the stock market “takes a dive” 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. Now Our National Debt is surpassing $40 Trillion with “no end in sight” and to further amplify this continuing problematic issue we constantly face as a nation, just the other day as per Reuters:
“WASHINGTON/NEW YORK, Aug 19 (Reuters) – The U.S. Treasury announced on Wednesday support measures for long-duration bonds, stepping in to staunch, at least temporarily, an upward march in yields that had unnerved global investors.
The move to double buyback sizes for long-duration debt came after a major bond selloff pushed the 30-year Treasury yield to its highest level since 2007 amid worries of an imminent escalation in the U.S.-Israeli war with Iran and rising concerns over a deteriorating U.S. fiscal picture. Higher bond yields push up borrowing costs, squeezing households, companies, financial markets and the federal budget alike. Total public debt outstanding topped the $40 trillion mark on Wednesday.”
With a further update on Thursday by CNBC as follows
Bond yields climbed on Thursday, coming back from the pullback they saw the previous day after the Treasury Department announced an intervention aimed at easing pressure on longer-dated government debt.
The moves underscored the difficulty of market interventions, particularly at a time when U.S. debt faces a slew of factors that have been pressuring yields higher.
In a move announced Wednesday morning, the Treasury Department, led by Secretary Scott Bessent, said it would at least double the size of its government debt buybacks, starting Sept. 9 and running through Nov. 4.
And again>>
What I’m MOST afraid about Mrs. MacGuineas is Our Bond Market and how well we will be able to continue to handle Our Growing $40 Trillion Dollar National Debt pending any (unexpected) financial catastrophe before your Plan or other similar plans can be implemented to handle and better control Our Rising $40 National Debt cutting back our almost 6% over-budget Debt to GDP ratio down to at least 3% as you have indicated yourself
And googling further
Maya MacGuineas, president of the budget watchdogs at the Committee for a Responsible Federal Budget, foresaw this latest milestone in a statement earlier this month, noting that government overspending in July alone had set a pace of $14 billion in new debt every single day.
“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 deficits to 3% of GDP. (That figure currently stands at 5.8%.)
And on Friday, August 21, Fortune reported the following:
Treasury Secretary Scott Bessent appears to be heading down a path like Japan’s, and it signals “debasement” of the dollar, according to a top economist.
In a Substack post on Thursday, Robin Brooks, a senior fellow at the Brookings Institution and former chief economist at the Institute of International Finance, sounded the alarm on the Treasury Department’s plan to increase buybacks of long-term bonds.
The announcement came after the 30-year yield hit the highest level in nearly 20 years. While yields briefly retreated, they soon climbed back to their earlier levels as Wall Street doubted Bessent’s ability to hold back the $32 trillion Treasury market.
Brooks dismissed the buyback scheme as mere financial engineering that doesn’t address the mounting stress in the Treasury market. At the same time, it also confirmed there’s no desire to tackle the underlying problem of the deficit, which is on track to reach $2 trillion this fiscal year.
“When fiscal policy is out of control, governments can obviously do many things to cap yields, but this just puts depreciation pressure on the currency because markets don’t get paid the kind of risk premium they desire,” he wrote. “What would be a debt crisis thus morphs into a currency crisis, which is why the Yen has been falling for so many years.”
Brooks has long highlighted Japan’s efforts to keep its bond yields artificially low as a way of keeping its massive debt burden, which tops 200% of GDP, in check. With markets unable to price Japanese debt properly, investors have sent the yen lower.
Similarly, the Treasury’s buyback plan caused the dollar to tumble in what Wall Street has dubbed the return of the “debasement trade.” That was accompanied by a jump in precious metal prices, as investors anticipate further dollar devaluation.
“Markets are primed for Dollar debasement to resume and — as Japan shows — it can be next to impossible to stabilize a currency once it enters a devaluation spiral,” Brooks warned. “The U.S. is playing with fire with this buyback.”
AGAIN, My MAIN concern Mrs. MacGuineas is that investors and IN PARTICULAR FOREIGN GOVERNMENTS and other investors hopefully will continue to AND NOT WITHDRAW TO fund Our National Debt until Your Committee for a Responsible Federal Budget can get the opportunity to do “what needs to be done.”
And googling again>>“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 even more importantly keeping The Dollar from losing its status as The World’s Reserve Currency while the problems of Our Economy are 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 to prevent a potential WHOLESALE bond sales threat by a collective of foreign nations should such ever materialize would be Stablecoins which, as you know, 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 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 (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 MY IDEA MRS. MACGUINEAS
Another way “to fill the void left by disenchanted governments” should Stablecoin use not be enough (by itself) 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!!
And re-googling again>>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 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 their 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 re-investing this money back into their business(es) and make a more reasonable and substantial profit!!! More on this later in this letter.
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 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 tariffs:
Now with The Supreme Court’s recent ruling on Trump’s reciprocal 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, 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 124 percent. Some nations are even higher with Japan at 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!!
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 70, 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 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 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, a relatively miniscule amount, wouldn’t that still, in some way, be a “tax” that the importer could 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 with Stablecoin which then could be used to pay foreign importer-shippers 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 would solve the problem of making sure 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 finally–Just to introduce myself>>
Name’s Harry Zimmerman. I’m a writer for a magazine (AMASS Magazine) published by The Society for Popular Democracy headquartered in Westwood on Wilshire Blvd in Los Angeles near UCLA. It’s published quarterly and just came out with its 100th issue and covers Social Issues, Politics and The Economy. My specialty being US Economic Policy and have been writing for the magazine since 2021. Just to give some perspective, the other person who writes about The Economy for this magazine, Ellen Brown, has written 13 books!!
I’m semi-retired now. In my heyday as an attorney had a very successful law practice also teaching for a bit at junior and career colleges ’til my practice grew. And before law school? Was an auto mechanic, auto repair shop owner.
My very first article was about The Real Estate Market Crash of 2007 and the subsequent Unemployment Rate hitting 10.3%. Then there was talk of a Tax Moratorium to stimulate consumer spending and The Economy. At the time I was an attorney with my own practice and previously as an auto mechanic, auto repair shop owner, I had been doing my own taxes for years before taking my income and itemized expenses to a licensed tax preparer who would actually file my tax return.
Because of this, I had learned about the Federal Income Tax Standard Deduction and though I felt (like everybody else) that Congress needs to and can cut their budget, the government, for the most part, I felt, had legitimate expenditures and because of that, a Tax Moratorium to me wasn’t a good idea but argued instead that to stimulate consumer spending and The Economy, stop business closures, layoffs and put people back to work, all we needed to do was simply raise the Standard Deduction so that people would have more take-home pay leftover in their paychecks after taxes and for the most part would immediately spend that extra cash right back into The Economy. As a result, business closures and layoffs stopped, people were hired back to work, and the Unemployment Rate went way down.
So I emailed my idea in to the Whitehouse website and all I got back was a Thank You Concerned Citizen. So I immediately thought what I had sent in wasn’t a good idea after all. That was back in 2010. Then when Trump passed the Corporate Tax and Jobs Act in, I believe, in November of 2017, lowering the corporate tax rate from 35% to 21%, he also doubled the Standard Deduction from $6,000 to $12,000 for the individual taxpayer and then doubled that to a whopping $24,000 for married couples.
Though my figures were slightly different in what I had sent to the Obama Whitehouse website, what I had written was the basic gist of what Trump had done. But don’t get me wrong, Trump lacks the morals and character to be President.
But getting back to my little story here–That’s when I first believed I knew something about The Economy after all!! So I hired an IT guy (whom btw i still use to this day) to create and launch my website ontheeconomy.com which btw is different than the magazine I write for.
Then one day when I was in hamburger stand restaurant I saw AMASS Magazine, picked up a copy, enjoyed the magazine so much, then wrote and submitted a sample article and took it in, The owner liked it and I’ve been writing for them ever since, since 2021.
So MRS. MACGUINEAS
