Trump just soft-launched higher inflation as the new solution for rebalancing the $40 trillion U.S. national debt

It was an outcome that droves of economists warned was coming: Higher inflation being tolerated—consciously or otherwise—to bring down the value of America’s $40 trillion national debt.President Trump and his second administration haven’t been short of ideas on how to rebalance the national debt, which now demands $2 trillion in interest payments a year. The White House suggested everything from tariffs to visa revenues might be directed towards the debt accumulated by both Republican and Democrat governments.The key metric is the U.S. debt-to-GDP ratio, currently at more than 120%. When that balance tips too far, it signals that a nation is borrowing beyond its economic growth, and higher risk premiums become attached to lending as a result.

Raising revenues through tariffs, for example, would have addressed the balance by lowering debt. Economic growth could also impact the ratio from the other side. Trump and key members of his team, such as Treasury Secretary Scott Bessent, have suggested this is now the path forward to........

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