U.S. Treasury borrowing costs climbed to multi-year highs last week, with the 30-year bond yield at auction reaching its highest level since 2001 as investors digested a record July budget deficit and a national debt nearing $40 trillion.

A Decade of Runaway Spending

Charlie Bilello, chief market strategist at investment firm Creative Planning, said in a post on X that federal spending has grown far faster than tax revenue over the past decade, a gap that has more than doubled the national debt.

Over the last 10 years, U.S. Federal Government Tax Revenue has increased 65% to $5.3 trillion, while Government Spending has increased 96% to $7.3 trillion. The result: a more than doubling of the U.S. National Debt from $19 trillion to $39 trillion.

He added that the debt alone has grown by over $550 billion since July.

“The Federal Government continues to borrow from our future to spend money like drunken sailors today. Everything they said about ‘balancing the budget’ was a lie,” he said.

Bilello revisited a comment President Donald Trump made a year ago, pledging to pay down debt and potentially issue dividends to lower and middle-income Americans. In the year since, he noted, the debt has grown by more than $3 trillion, no dividend materialized, and inflation has risen.

At the time of writing, the country’s debt stood at $39.92 trillion.

Treasury Yields and Deficit Hit Multi-Decade Highs

The U.S. sold $25 billion of 30-year Treasury bonds on Thursday at a 5.216% yield, the highest since 2001. That followed a $42 billion 10-year note auction on Wednesday that cleared at 4.683%, the highest borrowing cost for that maturity since 2007.

According to market commentator The Kobeissi Letter, the Treasury’s July budget deficit surged $141 billion year-over-year to $432 billion, the largest July total on record, pushing the trailing 12-month deficit to $2 trillion.

The Backlash Builds

Last week, Sen. Rand Paul (R-Ky.) criticized the spending, saying, “we shouldn’t be spending $432B, that we don’t have, in a single month,” and called for cuts to government size, spending, fraud, and welfare benefits for undocumented immigrants.

Veteran economist Peter Schiff said the national debt has surpassed $39.9 trillion and could hit $40 trillion by month-end, warning the Federal Reserve may respond by ramping up Treasury purchases, which he said could send consumer prices higher.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by MarketDash editors.