63% Down on Government Bonds: The Debt Black Hole Nobody in Washington Will Admit To

Let’s Start With a Number They Hope You Never See

A long-duration government bond ETF. Down 63 percent. Over six years. On government bonds.

The 30-year Treasury yield went from 0.8 percent to 5.3 percent. That’s not a market fluctuation. That is the financial equivalent of a building’s foundation cracking while everyone inside keeps rearranging furniture and telling you the place has never looked better.

This is the black hole I’m talking about. And once you understand the gravity of it, you can’t un-see it.

Fiscal Year 2026: The Real Scorecard

First ten months of fiscal year 2026, October 2025 through now.

• Government revenue collected from you: $4.5 trillion
• Government spending: $6.3 trillion
• Shortfall being added to the debt: $1.8 trillion in ten months

We’re being sold stories about tariff revenue riding in to save the day and a new era of fiscal responsibility. I want you to look at those two numbers and ask yourself a very simple question: does that look like fiscal responsibility to you?

I didn’t think so.

Inflation Is Not an Accident. It Is the Policy.

This is what they count on you not figuring out. Inflation is a tax. It is the most politically convenient tax ever invented because voters don’t feel it on a line item.

Here is how it works every single time:

• Politicians spend money they don’t have
• They borrow and print to cover it
• The currency loses value
• Your paycheck, your savings, your retirement account buys less
• They point at corporations and capitalism and call it someone else’s fault

And the worst part? It works. People buy it. They’ve been told for decades that inflation is just a mysterious economic weather pattern, not a direct consequence of government spending beyond its means.

The “Bad News Is Good News” Trap

Right now markets are cheering weak economic data. Soft retail sales. Soft jobs numbers. Why? Because weak data is supposed to pressure the Fed into cutting rates, and lower rates juice asset prices.

But here is what that logic skips over. If inflation stays sticky, and with this spending trajectory there is every reason to believe it will, the Fed is stuck. Their dual mandate handcuffs them. Kevin Warsh has floated putting more weight on the inflation side of that mandate. If that shift happens, the rate cut party Wall Street is pricing in could get canceled fast.

And if you’re sitting in long-duration bonds thinking you’re safe, the last six years just proved you wrong to the tune of 63 percent.

The Uncomfortable Part

I’m not going to let either party off the hook here, and I’m not going to let the electorate off the hook either. We keep sending the same people back to Washington. We keep accepting the same results. We keep looking to the same broken institution to solve problems it created.

The narrative that capitalism is the villain in this story is carefully crafted and entirely self-serving for the people running the printing press. Don’t fall for it.

Your protection comes from:

• Understanding that inflation is a deliberate policy outcome, not an act of nature
• Structuring your portfolio to account for persistent inflation, not just a brief spike
• Stopping the assumption that Washington will fix this before it gets worse

The black hole doesn’t care about your optimism. It only responds to preparation.