economy
Scott Bessent on the national debt: 'There's nothing magic about the $40 trillion number'
The U.S. national debt crossed $40 trillion for the first time this week, but Treasury Secretary Scott Bessent wants Americans—and markets—to shrug it off.
TL;DR
- U.S. national debt surpassed $40 trillion for the first time.
- Treasury Secretary Scott Bessent downplayed the significance of the $40 trillion mark, stating the U.S. can grow out of the debt.
- Bessent plans to increase Treasury's buyback operations for longer-dated securities to at least $4 billion per operation to improve bond market liquidity.
- He argued that the headline deficit is inflated by one-time tariff refunds and the expensing of new factories and equipment, which he considers an investment.
- Bessent anticipates a broader fiscal consolidation announcement from the White House soon, including spending cuts and revenue measures.
- He expressed optimism about core inflation decreasing and dismissed concerns about the labor market data, citing tighter immigration enforcement.
- The strategy of leaning on short-term Treasury bills to finance deficits, previously criticized by Bessent, continues.
- The Treasury Borrowing Advisory Committee (TBAC) warned of a $1.45 trillion funding shortfall in fiscal years 2027-28.