US Debt Hits $40 Trillion, Treasury Buys Back Bonds, and Europe's Pension Bomb Looks Worse

The national debt hit $40 trillion this August, according to Forbes senior contributor Erik Sherman, up from $38.5 trillion in January. That's $1.5 trillion added in seven months. Do that math seven more times and you land north of $50 trillion by 2030, the same trajectory Forbes flagged back in January.

Washington's response so far: spend more. The administration's proposed 2027 budget is its largest ever, according to Forbes, with no sign of cuts. It's just what the numbers show. Nobody in either party is running on austerity right now.

Treasury Is Now Buying Its Own Bonds

Business Insider reports the Treasury announced up to $4 billion in buybacks of U.S. government bonds, and CNBC reported the department may also tap its $1 trillion General Account to fund even more purchases. The goal is straightforward: keep a lid on long-term yields that have been climbing all year.

It worked, a little. The 30-year Treasury yield, which had touched its highest level since 2007, dipped 4 basis points to around 5.23% on the Monday Business Insider covered. The 10-year slipped 3 basis points to 4.7%.

But Citadel Securities isn't buying the fix. Nohshad Shah, the firm's head of EMEA fixed income sales, called it "financial repression at the margin," writing that policymakers are "attempting to suppress the market signal rather than resolve the underlying contradiction of procyclical easing in the middle of a generational capex cycle at full employment."

Translation: the government is papering over a debt problem instead of fixing it, and that usually backfires. The Richmond Fed noted in a 2021 paper that when the U.S. capped interest rates in the 1960s, yields ultimately roared back in the 1970s once the artificial support came off. Inflation spiked too, though the Richmond Fed also credited that partly to the 1970s oil shocks, not rate caps alone.

Treasury Secretary Scott Bessent has made lower rates a stated priority of the administration, following a public feud last year between President Trump and then-Fed Chair Jerome Powell over the same issue. Whether buybacks and General Account maneuvers count as legitimate debt management or as leaning on markets to hide a fiscal problem is a fair question. It depends on whether you think the underlying deficit trajectory gets fixed later or just gets deferred.

Social Security and Medicare's $95 Trillion Shadow

The headline debt number isn't even the whole story. Epoch Times columnist Daniel Lacalle points to official 2026 estimates putting the present value of Social Security and Medicare's financing gaps at roughly $95 trillion over 75 years, about 5% of projected cumulative GDP over that period. That sits alongside publicly held federal debt already projected at 101% of GDP this year.

But it's the kind of number that gets buried every time the debt ceiling fight or the latest jobs report eats the news cycle.

Why Lacalle Says Europe Might Blow First

Lacalle's actual argument, and it's a sharp one, is that the eurozone may crack before the U.S. does. He cites European Commission estimates putting net accrued public-pension liabilities at roughly 150% of GDP after future contributions, with gross pension promises around 371% of GDP. That excludes future health and long-term care spending pressure entirely.

Lacalle also notes France's sovereign bond yields have climbed above Italy's, a signal that markets are losing patience with Paris specifically. He argues no eurozone government is willing to cut spending or cap future liabilities, and that unfinanced committed liabilities exceed 300% of GDP in key euro-area nations. Euro-area sovereign assets have posted negative real returns since 2021, which is souring global investor appetite.

The dollar still has an edge here. It remains the world's reserve currency and Treasuries remain the benchmark safe asset for central banks, even as some diversify into gold, Lacalle notes. Europe doesn't have that cushion. Its official "Maastricht debt" figure only counts currency, deposits, loans, and debt securities at face value, leaving out the much larger pension and public-sector liabilities lurking underneath.

What CRFB Says a Crisis Actually Looks Like

The nonpartisan Committee for a Responsible Federal Budget, cited by Forbes, defines a fiscal crisis as a sharp economic shock triggered by high current or expected public borrowing. CRFB lays out categories including a financial crisis, where bond confidence collapses and yields spike; an inflation crisis, where governments try to monetize debt through financial repression; and austerity, where spending cuts get forced rather than chosen.

Nobody in these sources claims a crisis is imminent or has already started. What they agree on is the trajectory: debt is growing, fixes aren't coming, and traditional tools like buybacks are treating symptoms.

The unresolved question is which government runs out of room first, Washington or Brussels, and whether markets decide that before either capital does anything about it. France's bond yields exceeding Italy's is the kind of early tremor that usually gets noticed only after the fact.