You can do all this at an accounting level. But ultimately US government is buying things with debt, ie paying for goods and services from third parties with an IOU, and can only do it if people think they are getting a good deal.
The way you get shafted with debt is inflation. Barely a few years ago bond yields were around 0. If you lent money to the government then, you're already very behind because of inflation - you're not getting any interest, and by the time you are repaid, the money is worth far less than before.
Furthermore, the Fed can't really let interest rates diverge too much from inflation, since the mismatch drives inflation further. That's why the rates are around 4% now, even as the economy is slowing. They have to be up to contain inflation.
So then, as the election was playing out, you could see bond yields fluctuating in line with inflation expectation. Whenever Trump said something that sounded inflationary, like tarrifs, bond yields jumped up. That's not the Fed doing it, that's lenders demanding more interest from the US govt.
Now I agree the US can get away with this more than other places. They aren't far off Italian levels now, and that would be considered teetering around crisis levels. But it's fantasy to conclude the US can keep magicking money every year with no consequence.
The way you get shafted with debt is inflation. Barely a few years ago bond yields were around 0. If you lent money to the government then, you're already very behind because of inflation - you're not getting any interest, and by the time you are repaid, the money is worth far less than before.
Furthermore, the Fed can't really let interest rates diverge too much from inflation, since the mismatch drives inflation further. That's why the rates are around 4% now, even as the economy is slowing. They have to be up to contain inflation.
So then, as the election was playing out, you could see bond yields fluctuating in line with inflation expectation. Whenever Trump said something that sounded inflationary, like tarrifs, bond yields jumped up. That's not the Fed doing it, that's lenders demanding more interest from the US govt.
Now I agree the US can get away with this more than other places. They aren't far off Italian levels now, and that would be considered teetering around crisis levels. But it's fantasy to conclude the US can keep magicking money every year with no consequence.