Treasury Secretary Scott Bessent Claims US Can Grow Out of Debt

Treasury Secretary Scott Bessent stated that the United States can grow out of its national debt, which has now surpassed $40 trillion. This assertion comes as long-dated Treasury yields reach their highest levels since 2007, signaling increased fiscal pressure on the federal government.

To address current concerns, the Treasury highlighted historical precedents where Washington overcame financing crises through innovative funding mechanisms. These include creating new buyer classes during the Civil War, partnering with private financiers like J.P. Morgan in 1895 to stabilize gold reserves, and utilizing war bonds and yield pegs during World War II.

Other historical strategies cited include the 1960s Operation Twist to manage foreign dollar claims, the 1970s transition to market-based debt auctions, and the 1978 issuance of foreign-currency Carter bonds to defend the dollar.