"The largest non-emergency deficit we've ever run"

This economic analysis from Kelly Evans of CNBC is almost too good to excerpt and you should read the whole thing.  If you haven't been a fan of the economic turmoil we've recently experienced, well....

Unfortunately, it isn't over yet. In fact, like being trapped in a video game where each level gets progressively more difficult, the next chapter may be even more challenging. Because now, markets are freaking out over the government's fiscal problems. And we all know that might be the hardest thing for this country to try and solve. 

Bond yields keep rising as the Feds try to keep the money machine running.  Why?

The single biggest reason rates are rising is because the U.S. fiscal picture has been much worse than expected this year. The economic data have stopped getting noticeably better in recent weeks, even as the speed of the upward move in yields has increased.

It's all about the overspending:

And the biggest change since April, in terms of what could affect "real" yields, is not the U.S. long-term productivity picture, or demographics, or de-globalization, or what have you. It's the sharp increase in the budget deficit. Back in April, for instance, Goldman expected this year's deficit to be $1.6 trillion--already a hefty sum. But it actually came in at $2 trillion, and would have been $2.3 trillion if not for the Supreme Court's last-minute cancellation of the president's student loan forgiveness plan. 

And the problem is, there's no one-off "reason" for that sky-high figure, which is a doubling from last year and, at 7.4% of GDP, the largest non-emergency deficit we've ever run. Revenues have fallen back to historical averages after a surge in the two previous years, so that's not helping. But spending meanwhile remains about three points higher than it was pre-pandemic, and for a wide variety of reasons, from higher Medicare and Social Security payments, to a lack of Fed remittances, to FDIC spending on the bank bailouts, and so forth. 

As Evans notes, the rise in deficits, the increasing cost of the Federal government to service that debt, and runaway spending that nobody wants to cut is putting us into a "fiscal doom loop" that will be more and more difficult to avoid with inaction.  There's a feint towards entitlement reform but I've given up on that pipe dream, especially in an election year.