Core Viewpoint - The article discusses the challenges facing the U.S. economy, particularly the rising government borrowing costs and the implications of a potential increase in the national debt due to tax cuts and other fiscal policies [1][2]. Group 1: Economic Impact of Rising Debt - The U.S. economy is experiencing a second wave of challenges following the resolution of tariff issues, with rising government borrowing costs becoming increasingly evident [1]. - Moody's downgrade of the U.S. credit rating has led to a sell-off in U.S. Treasury bonds, causing yields to rise sharply, with the 30-year Treasury yield reaching 5.089%, the highest since October 2023 [2]. - The Congressional Budget Office (CBO) predicts that the Republican tax cuts could increase the deficit to about 7% of GDP, an unprecedented level for a low unemployment economy [2][3]. Group 2: Government and Consumer Borrowing Costs - As Treasury yields rise, the government faces higher interest payments on nearly $29 trillion in debt, potentially leading to increased taxes or reduced government services for citizens [4]. - The high interest rate environment not only affects government finances but also impacts consumers, as borrowing costs for significant purchases like homes and cars are linked to long-term yields [4]. Group 3: Political Stance on Fiscal Policy - There is skepticism regarding whether the Trump administration will make substantial fiscal adjustments, with Republican leaders arguing that the CBO's deficit projections are exaggerated [5]. - Analysts suggest that there will be no significant fiscal tightening in the foreseeable future, and the U.S. is likely to continue running large deficits [5][6]. - The Trump administration's previous promises to address the deficit through efficiency measures have been scaled back, indicating a lack of urgency in tackling the growing debt [6][7].