Global Bond Rout Deepens on US Fiscal Worries

The price of borrowing is climbing for the US as investors like China and Russia unload holdings of US treasury bills. The US has massive debt, representing about 10 percent of its GDP, and struggles for fiscal responsibility in a range of government programs, including health-care and retirement for senior citizens. Meanwhile the US president and Congress contemplate renewing across-the-board tax-cuts and slashing the payroll tax that funds Social Security payments for seniors. US leaders hope extra money from tax cuts will create new jobs. If the funds don’t produce growth and economic recovery, the global economy could face “Armageddon,” suggested one banker. Analysts warn “that the US must map out a credible strategy to control spending,” writes Ambrose Evans-Pritchard for the Telegraph. Eventually global investors could put the US in line after Greece and Ireland – demanding the world’s largest economy to take serious steps toward balancing its accounts. – YaleGlobal