Erik Bethel

So US government makes money by taking in taxes and we spend money on the military, Medicare, Medicaid, whatever, right?

The deficits are in the trillions.

And when we can't finance those deficits with tax revenue, what do we do?

Well, we issue bonds, right?

Treasury bonds and bills and so forth.

Printing money.

Well, see, the way it works is Treasury will issue bonds.

They have Treasury auctions.

We had one, in fact, last Wednesday.

We did a $16 billion auction.

But the bidders said, well, gosh, we want the rate to be higher.

We won't buy your Treasuries unless your 20-year, this is a 20-year auction, are high enough.

And they hit a five handle or five and change percent.

Why?

Well, for many reasons.

In part, it's because the big, beautiful bill adds $4 trillion of debt over the next 10 years, which seems financially illiterate because members of Congress just added on a bunch of pork to it.

The rating agencies jumped on the bandwagon.

Bond yields fell.

But look, we're...

You know those Mission Impossible movies where there's a train that's lurching off a cliff and Tom Cruise is trying to escape and it's like the train is being held by a wire that's starting to fray?