John Plender

Well, the public debt in America now exceeds 100% of GDP.

So we're talking very large numbers indeed, which are quite hard to wrap one's head around.

Well, the public debt in America now exceeds 100% of GDP.

GDP is just over $32 trillion.

So we're talking very large numbers indeed, which are quite hard to wrap one's head around.

This is unprecedented in peacetime.

The reason I felt a need to write about this at the moment was, first of all, Donald Trump's war of choice in Iran.

which is going to be very, very costly.

I think the other reason I felt a need to write about this issue of imperial overstretch is that I detect nervousness in the markets.

It started around the time of Trump's announcement of tariffs, but there have been periodic bouts of nerves in the treasury market, which I think are rather unusual, and they are indicative of people being scared about the public debt, also about Trump's erratic policymaking.

So, John, how did we get here?

I think the striking thing about today's debt situation is that since 9-11, America's wars have been entirely financed by debt.

The cost of the war in Iraq and Afghanistan and the other forays into the Middle East has been put by Brown University's Cost of Wars project at about $8 trillion.

Well, you have to bear in mind that President Trump has submitted to Congress a national defense budget request for 2027 of an extraordinary 1.5 trillion, which is double the figure for 2020.

And I think...

Although there have been promises from President Trump and from Scott Besant, the U.S.

Treasury Secretary, to get these numbers down, the fact is that there is a deficit bias built into American politics.

Politics are very, very polarized, and it's very hard for anybody to make and fulfill a promise to bring down the level of debt.

My money is on a continuing increase in the debt for the rest of the Trump period, but then the deficit bias will continue under any new president

in two years' time.