Is US Government Debt Getting Riskier?

Looking at the benchmark interest rate for 30-year US Treasury debt, long-term interest rates have been rising. Any price change might happen for a number of different reasons: 1) expectations of future inflation are causing investors in Treasury debt to demand a higher rate; 2) as US government debt continues to climb, the perceived risk of this debt is rising; 3) the surge in productivity that will come from recent developments in information technology is pushing up demand for capital, and thus pushing up interest rates; 4) The higher intereset rates aren’t a US phenomonon, but rather a global one, and thus need a global explanation; and more. Hanno Lustig makes the case for a risk-based explanation in “America’s Risky Debt: What Markets See That Policymakers Don’t (Aspen Economic Strategy Group, August 2026, forthcoming The American Economy in a New Era, edited by Melissa S. Kearney and Luke Pardue). Lustig lays out several pieces of evidence for a risk-based explanation. For…