The U.S. government debt crossed $40 trillion this week. Doubled in ten years. Retail traders immediately checked their portfolios to see if this meant they should buy more Tesla calls.
Here's what happened: The government spent money it didn't have. Then it spent more money it didn't have. Then it did that for another 3,650 days straight. Journalists acted surprised when the number got bigger.
The technical analysis is clean. Debt goes up. It has gone up for sixty years. It will go up tomorrow. Anyone who shorted Treasury bonds because they read a scary headline about fiscal responsibility is currently living in a cardboard box behind a Wendy's, wondering why the market didn't care about their sound reasoning.
Forty trillion is double what it was in 2016. Know what else doubled? The S&P 500. But Gary from Reddit sold everything in 2018 because he read that deficits matter. Gary now drives for Uber and explains Modern Monetary Theory to passengers who can't escape.
The bond market yawned. Yields did nothing interesting. The dollar remains the cleanest dirty shirt in the global laundry basket. Turns out when you're the reserve currency, you can print money until the paper runs out, and the rest of the world just asks for more.
Every decade some genius discovers that government debt is high. They write a book. They go on television. They warn everyone. The debt goes higher. Their book ends up in a clearance bin next to cookbooks from celebrities nobody remembers.
Forty trillion dollars. The figure means absolutely nothing to your trading account. It will not help you pick stocks. It will not predict the next recession. It exists purely so financial media has something to write about on slow news days and so your uncle can forward you articles with the subject line "THIS IS IT."
The chart goes up and to the right forever, just like your losses.
Photo by Marek Studzinski on Unsplash
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