Markets wrestle with Trump's unconventional debt ideas

Trump might turn to unconventional ideas to try to bring the ballooning U.S. debt under control, after the president insisted he won't cut popular health and retirement benefits.

Some of Trump's advisers have espoused unorthodox ideas in recent months, including forcing foreign governments to swap Treasuries for cheaper bonds in order to reduce interest payments and selling residency cards to rich foreigners at $5 million a pop.

With many officials and economists saying that U.S. debt is on an unsustainable path, investors in U.S. bonds, currency and equities markets are starting to pay more attention to these ideas.

U.S. debt stands at $36 trillion, or more than 120% of annual economic output (GDP), and is rising fast as the government spends more than it raises in taxes. Last year, the U.S. budget deficit topped 6% of GDP — though Treasury Secretary Scott Bessent has said he wants to halve that.

Trump's new administration has launched aggressive moves to cut federal spending through Elon Musk's Department of Government Efficiency (DOGE). And it has announced plans to raise additional revenue by imposing heavy tariffs on imports from trade partners including China, Mexico and Canada.

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