It’s too soon to tell whether the recent selloff in U.S. government debt reflects an exodus of overseas investors. Yet there are early signs that something is afoot. The sheer scale of possible future moves makes it a scenario that investors – and Uncle Sam – must contemplate.

Since its inception, DOGE has saved $931.68 per taxpayer — a total of $150 billion — according to the agency’s website, as of April 11.

The ratings agency Moody’s joined many other debt watchdogs recently in expressing alarm at the rapidly deteriorating fiscal situation of the US government. Moody’s still rates US debt as AAA, the highest level, but in 2023 it lowered its outlook from stable to negative. Two other rating agencies, Standard & Poor’s (S&P) and Fitch, have already cut the US rating one notch, from AAA to AA+.

The U.S. economy expanded at a healthy annual 2.4% pace the final three months of 2024, supported by a year-end surge in consumer spending, the government said Thursday in a slight upgrade of its previous estimate of fourth-quarter growth.

The newly announced Department of Governmental Efficiency, to be known by the acronym DOGE (get it?) and headed by billionaire Elon Musk and entrepreneur Vivek Ramaswamy, is evidence that President-elect Donald Trump’s administration will at least attempt to deregulate the U.S. economy. All memes aside, this could turn out to be a worthwhile enterprise, deserving of bipartisan support — so long as people temper their expectations.

"The failure of Silicon Valley Bank (SVB) was not a surprise to regulators or investors who took the time to check the bank’s financial statements and footnotes. By March of 2021, unrealized debt securities losses for the bank had already begun to climb, reaching ($1,343) million by year-end December 2021, and leaping to ($15,160) million a year later, all the while the bank’s stockholders’ equity remained flat."

"A Fifth Circuit panel ruled Wednesday that the Consumer Financial Protection Bureau’s unusual funding structure is unconstitutional, in a lawsuit brought by a small-dollar (payday) lending group. CEI legal and policy experts have long objected to the bureau’s unaccountability, starting with its unchecked, direct funding from the Federal Reserve. CEI previously filed a lawsuit on this subject in the D.C. Circuit in National Bank of Big Spring v. Mnuchin."

"U.S. Supreme Court Justice Louis Brandeis saw states as “laboratories of democracy” conducting “experiments” in public policy. Today, more than eight decades after Brandeis coined the phrase, state experimentation with tax policy makes it abundantly clear that tax policy has a direct impact on economic growth. As shown on page 27, each of the eleven states that enacted an income tax since 1960 now has a smaller share of state GDP relative to the other 39 states and each one also has a smaller share of state and local tax revenue. That is a remarkable statistic; those eleven states enacted a new source of tax revenue and lost revenue share to other states! On the contrary, states with low tax burdens and states without an income tax consistently outshine their higher-burden peers on the key, tangible economic measures like growth in private-sector jobs, GDP, and wages. What’s more, citizens are taking notice and “voting with their feet” by flock- ing to low-burden states from higher-burden counterparts. Skeptics try to dismiss this definitive migratory trend by cherry-picking success stories like Texas and Florida and characterizing them as ‘’happy accidents” of favorable geography, climate, and/or resource abundance."

"The Biden administration’s decision to recruit nearly 90,000 new IRS auditors could have a chilling effect on small businesses and economic growth, permanently impeding our nation’s ability to recover from its current economic malaise.

As part of the misleadingly titled “Inflation Reduction Act,” President Biden and his allies secured roughly $80 billion in new IRS funding to hire 87,000 auditors. This is bad news for the American economy."

"The student loans owed to the Federal government – over $1.6 trillion dollars and growing – are shown as assets on the government’s books.

The Government Accounting Office (GAO) did a deep dive into the recent actual Direct Loan repayment history at the request of Congress persons.

The purpose of the report,  released last month, is stated here:

https://www.gao.gov/products/gao-22-105365

 “This report examines how and why Education’s Direct Loan cost estimates have changed over time. A forthcoming report will examine government and private sector estimation methods and Education’s approach to estimating Direct Loan costs.” 

Guess what? – the government has consistently over-estimated how much student loan debt would be repaid."