This has been a week of pain for anyone who borrows money.
All over the world, lenders are demanding higher interest rates. The global bond market is extracting higher yields from every borrower, starting with the biggest borrowers of all: national governments. But not every government is paying equally.
Trustworthy borrowers with solid finances and honest leadership pay less. Distrusted borrowers with disordered finances and corrupt leaders pay more. In times past, the United States would have headed that first list. Under President Trump, the United States has tumbled onto the second one.
In trading yesterday, the yield on a U.S. 10-year Treasury bond hovered near 5.2 percent. Germany pays less than the United States. France pays less than the United States. Canada pays less than the United States. Even Greece pays less than the United States. Estonia—a country under constant threat of a Russian invasion and the annihilation of its sovereignty—pays much less than the United States: only 3.6 percent.
Most reporting on the bond market emphasizes the Iran war, global inflation, and the surge in government debt during the global pandemic. These are the conditions faced by every major borrower. But they don’t explain why American debt is more expensive than the debt of Greece or Estonia.
[Read: Economists who weren’t worried about the debt are now panicking]
In April 2011, then-Representative Paul Ryan delivered a speech at the American Enterprise Institute to warn of an imminent debt crisis in the United States. The country’s debt stood at $14.3 trillion, and Ryan’s Republican Party had won control of the House the year before. It would win a majority in the Senate in 2014, and take the presidency in 2016. In 2017, when Ryan was speaker of the House, Congress enacted and Trump signed a big 10-year tax cut without comparable spending offsets. The national debt climbed to $23.2 trillion by early 2020, then spiked further as the U.S. government—like governments everywhere—spent massively during the pandemic and its aftermath.
By the time Trump returned to office in 2025, the national debt had reached $34 trillion. Trump and the Republican-led House and Senate he helped usher in could have restored fiscal discipline. Instead, they made the 2017 tax cut permanent, again without comparable spending offsets. (Trump did try to offset his 2025 tax cuts with revenue from his unilateral tariffs—paid for by American businesses and consumers—but the Supreme Court ruled the tariffs illegal. Trump’s new “love me, love me” taxpayer-funded campaign ad touts what he calls the “largest tax cuts in history,” but ignores both the gaping deficits and his abortive tariffs.)
The U.S. national debt surpassed $40 trillion in August 2026. On the current trajectory, it will exceed $50 trillion by 2030, the year after Trump is constitutionally required to leave office. The United States now pays more to service its debt than it spends on national defense. By the end of the Trump presidency, interest costs will exceed Medicare funding too.
Other countries also have big debts. Why, then, do Americans pay higher interest rates than most other large democracies? This is partly a data problem. America’s debt-to-GDP ratio is about double that of Germany, the Netherlands, and Scandinavian countries, and it continues to rise fast while the debt burdens of other seriously indebted countries, such as Italy and Greece, are steady or declining.
But much of the problem can be blamed on Trump and the GOP, the so-called party of fiscal discipline. The European Union has a truly independent central bank. Countries that use the euro, including Greece and Estonia, cannot simply inflate their way out of debt. In the United States under Trump, however, the White House has steadily attacked and subverted the Federal Reserve’s independence. Last year, Trump attempted to remove a Fed governor and threatened to fire the Fed’s then-chair, Jerome Powell, after the board failed to lower interest rates. Earlier this year, the Trump administration initiated criminal investigations against Powell, presumably to pressure the Fed to loosen monetary policy. The Fed—now chaired by Kevin Warsh, Trump’s pick for Powell’s successor—seems to have withstood these assaults so far. But dollar-holders should worry about the next time.
In an unprecedented act that could threaten the global economy and destroy trust in the dollar, Trump has speculated about refusing to pay some or all of the country’s public debt. In a CNN town hall in 2023, Trump urged congressional Republicans to “do a default” to force “massive” spending cuts on the Biden administration. In 2024, Trump’s chief economist, Stephen Miran, wrote up and circulated a plan to reduce the country’s borrowing costs by forcing U.S. creditors to swap existing debt for longer-term bonds at lower interest rates. Trump later appointed Miran to the Federal Reserve board of governors; Miran resigned this past May to make room for Warsh.
[Listen: What happens if the U.S. defaults?]
The Trump presidency will end. Yet a readiness to default has become a signature theme of Republican politics. U.S. debt is subject to a strange artifact called the debt ceiling, which imposes a maximum limit on federal borrowing. In the past, the majority party would raise the ceiling as required, while the minority party intoned scolding speeches about fiscal irresponsibility. After 2010, however, Republicans in Congress began to use the debt ceiling as a political weapon.
In 2011, the Republican House majority refused to raise the ceiling until the country was within days of a debt default, prompting the rating agency Standard & Poor’s to strip the U.S. of its long-term triple-A credit rating. Republicans again pushed the country to within hours or days of hitting the debt ceiling in 2013 and 2015—and then again, at Trump’s urging, in 2023. Another agency, Fitch, dropped its triple-A rating of U.S. debt that year, citing “erosion of governance” as a principal cause. After Trump’s threats to fire Powell raised questions about the central bank’s independence last year, the last major rating agency, Moody’s, downgraded the U.S., citing expanding fiscal deficits and rising interest costs.
The corruption of the Trump administration, enabled by Republicans in the House and Senate, also bears blame for the country’s rising borrowing costs.
A 2006 study found that the more corrupt a country was rated by the nonprofit Transparency International, the more it paid for its debt. Within the United States, more corrupt states pay higher interest rates than more honest states. In August 2024, a Trump-campaign social-media account posted an anti-immigration warning: “Import the third world … Become the third world.” Yet Trump’s multibillion-dollar self-enrichment schemes, perversion of presidential pardons, attacks on the independence of the Federal Reserve, and costly vanity projects throughout Washington all make the United States look more like Pakistan, Nigeria, or the Philippines than a consolidated democracy.
Americans are now paying for these crooked extravagances on their mortgages, car loans, student debt, and credit-card interest statements. When it comes to borrowing rates, the United States now sits between Estonia and countries in deep financial trouble. This is not all because of Trump, but it wouldn’t have happened without him and those who enabled him.