Since 2001, the U.S. government has consistently spent more than it has earned, resulting in annual budget deficits that have steadily added to the national stock of debt. How severe has the situation become now that Moody’s has downgraded the U.S. federal debt?
 

The U.S. Treasury market – the world's largest and most liquid government bond market – has grown to USD 36Tn. It has been allowed to expand in nominal and real terms because it is widely considered a trusted safe-haven asset. The U.S. government debt yields are commonly considered as the risk-free rate. Despite its size, the Treasury market can still absorb substantial demand for its issuances as there are few viable alternatives.