Business analyst and reporter Richard Quest (YouTube Screengrab)
British journalist and CNN business reporter Richard Quest minced no words while discussing the nation’s ballooning debt under President Donald Trump and Republicans.
CNN anchor Jake Tapper reported on Wednesday that the U.S. national debt had crossed the $40 trillion mark.
“That's a big deal, especially for you kids watching out there, because you're going to have to pay it off. It's a milestone that will currently impact every american, every business. And of course, the federal government,” said Tapper, ushering Quest to speak.
“It’s very simple,” said Quest. “It costs more money for everybody to borrow. Why? Because the federal government borrowing money at these sort of rates. By the way, it's the highest rates for long for 30-year bonds since 2007. And what that means is everything else that's related to it, for example, mortgages are also costing more money. Give you an example. A year ago, a 30 year mortgage was 6.5. today it is 6.6. doesn't sound much, but if you think about the federal government spending $1 trillion a year just paying interest, 20 percent of all tax revenue is going just to pay the interest on that number.”
“You start to see why this is so serious and why it crowds out and makes it much more difficult for everybody else,” Quest added. “And that's, by the way, just to be technical, is why today the treasury started this twist operation to try and bring down rates.
Money used to pay the interest on $400 trillion means hundreds of billions of dollars that is not being spent on education or health care,” said Tapper, growing nervous about what his children were facing in 20 or 30 years.
“There will come a moment where the bond market will not continue to supply the level of funds to the U.S. government that it is at the moment,” answered Quest. “… I remember when that number, $40 trillion, was $16 trillion, and everybody said, ‘when is the U.S. going to get serious about debt reduction?’ And then again, and again, and again. And at the moment, from the one Big, Beautiful Bill and beyond, there is no serious, credible attempt at long term debt reduction.”
“Until there is, that number gets bigger. Interest rates remain higher. Higher costs for borrowers. And your children, Jake, will be paying the bill.”