United States can “certainly” afford to support wars on two fronts – Yellen

A runaway deficit already at around $2tn pa and rising interest rates as the US government is forced to compete for funds to pay for this and US Treasury Secretary Janet Yellen wants us to believe her administration can afford another war.  For those bond funds already burned from believing her claims in 2021 that inflation (and therefore interest rate increases) were “transitory“, may be forgiven in being somewhat skeptical about this claim. This of course is from someone who as Fed Chairman was instrumental in encouraging these very deficits that have left total US public debt at over $33.5tn and facing a maturities tsunami which will explode the interest cost to service all of this to a level higher even than the defense budget.

For someone facing the challenge of persuading those very bond investors to keep on buying the governments increasingly worthless debt, this does seem a rather counterproductive narrative to be adopting.  Either the USD is going down, and/or Treasury yields have yet to peak on this sort of talk, so well done Janet!


A $2tn ps deficit and Yellen thinks she can afford another war!