Spreads over time

Spreads

Federal Surplus

Plots of one , five, ten, 20 and 30 year Treasury yields. Missing rates for 20 yr and 30 yr have been interpolated. Debt rises when spreads are high because the Fed increases the spread during downturns, and Congress runs a deficit. Notice that this cycle is deeper as total yields go lower.

The process starts with the tech revolution in 1990. We are successively forcing the central government to deal with the new productivity, which Congress fails to do. The real economy comes up against constraints imposed ny central government, central government fails to deal with, forcing long term debt up.