The Warning Signs Are Suddenly Everywhere

These are four stories that seem unrelated: 1) The bond markets are collapsing; 2) Ninety percent of Americans believe that the government is corrupt; 3) Bernie Sanders wants to jail you for 20 years if you develop AI any further; and 4) Russia is prodding NATO and China is prodding Japan.

But all four are part of the same big story.

Nobody else in American politics will tell you this, so I’m going to. There is, in fact, a uniparty. That uniparty is hell-bent on bankrupting the country, all in the name of populism.

Empires don’t die. Empires generally commit suicide, and in the same way: by spending too much money. They may spend too much money in different ways, but they all die the same way: they run out of money.

Here in the United States, we spent the money, and then we spent more of the money, and now we are spending all the money for the rest of time.

That brings us to our first story. Our bond markets are in a state of total disarray right now. As PBS reports:

Interest rates on government bonds are rising again around the world, making borrowing more expensive for consumers and businesses and heightening concerns about whether governments are issuing more debt than financial markets can handle. On Tuesday, the yield on the ten year Treasury, which strongly influences mortgage rates, reached 4.8%. That’s the highest since early 2025. The five-year Treasury, which is a benchmark for auto loans, touched as high as level since October 2025 at 4.55%.

For those who don’t know, the way that the bond markets work goes like this: You buy a bond. The bond returns 10% year on year — which would be an amazing bond, but we are keeping the math simple here — you pay $100 for the bond; every year you receive $10. So the bond yield is the difference between the price that you paid for the bond and what you receive for the bond, and that’s what the yield is. Typically, the yield is a measure of the return you receive relative to the price you paid.

When we say that bond yields are rising, we mean typically that the price for bonds is falling, meaning that there’s not a lot of demand for bonds, and you are paying a lower price for bonds. The facial rate of interest is exactly the same.

What does that actually mean? It means there’s no market for bonds; people don’t want to buy bonds.

Sometimes that’s happening because people would rather invest in the stock market because it is soaring. Sometimes it means people don’t want to buy bonds because they are very nervous that anyone will ever be able to pay them off, except in inflated currency. The latter scenario  seems to be happening right now, and this is having some broad spillover effect in the American economy.

Mortgage rates have now hit their highest level in over a year.

All of this is happening because people, central banks, and other governments are all realizing that we in the United States are never going to stop spending — ever.

In 2010, the Tea Party was laser-focused on this topic. But since then, we’ve decided the American people are either too stupid or too greedy to handle the reality: we spend far too much money.

We are never going to stop spending because we have a uniparty. Both parties now agree that government is generally the solution to our problems. Neither party seems truly committed to the reality: that free markets not only are fairer and better, but they also create prosperity and innovation; and if you do the reverse- if you regulate and you tax and you welfare everything- you destroy your own country.

In 2016, President Trump famously changed the nature of the game in politics on the right side of the aisle by saying he would never touch entitlement programs again. He was doing that because he was a populist. It is always popular to tell people you’re not going to touch the entitlement programs because people like their government checks.

But is that fiscally responsible? Of course not.

That position is currently embraced by most of the Republican Party.

That’s story number one. Story number two is that 90% of the American public believes the government is corrupt.

Republicans have always largely agreed that the government is corrupt. Democrats, because Trump is the president, have now decided that the government is corrupt.

The American people are not wrong. Government is, in fact, corrupt. There’s tremendous corruption in our current government, not just at the top levels; it is rampant throughout the system. Here is the sad reality: When you turn the federal government into the most powerful entity on planet Earth, capable of making people rich or poor, of regulating and taxing you into submission and poverty, or of subsidizing and regulatory capturing you into great wealth, the natural result is corruption.

John Dillinger robbed banks because that’s where the money was. And people do corrupt things because that’s where the money is. No one in human history has ever worried about the corruption of a small, powerless government because if it’s small and powerless, it can’t do much.

But when you have a government that is spending $7 trillion a year, it turns out there’s an awful lot of corruption. The American people know that, but they don’t want to recognize the correlation between the size of government and the size of corruption.

Story number three: Bernie Sanders trying to destroy AI.

Let’s assume that the national debt is baked into the cake, which it is. Let’s assume we’ll soon be paying more in interest on the national debt than we pay for our military, which is true. Let’s assume the American public has no desire to radically inflate the currency, radically increase its own taxes, or radically cut, which are usually the three ways out of a massive fiscal disaster.

You either have to inflate the currency and pay people back in meaningless dollars, or you have to take radical austerity measures —  which you don’t want to do — or you have to somehow grow your way out of it.

You could theoretically grow your way out of it, a case that the GOP is making. You can have your cake and eat it too, because we have this thing called the AI boom, and the AI boom is going to allow our economy to grow rapidly.

Tax expenditures will go up even faster than government spending. It’s not a totally implausible case.

This is the case being made by most of the smart people inside the Trump administration: AI is going to radically increase productivity and efficiency, and that will allow for radical increases in GDP growth rates.

Either we win the AI race, or China will. AI is not going to disappear. So either we capture those gains here in the United States, or we are the consumers of the gains of others outside the United States. President Trump understands this; I radically disagree with him on government spending, but he is not wrong on innovation. He’s quite correct.

Put all of your questions to the side about AI on an economic level for a second. AI is the only thing currently on the horizon that allows us to — at least theoretically — outgrow the massive debt problems we are currently incurring.

Which means that Bernie Sanders, a communist, immediately wants to quash AI, just like China.

The idea that Bernie Sanders is going to restrict innovation – this person who has not developed a useful thing his entire life and has been, as I have said 1 million times at this point, a leech on the ass of American society – is astonishing.

The anti-tech blowback is quite real. People are concerned about the future. They are used to the status quo, where we can just spend money endlessly without ever having to pay for anything or increase productivity. And so the anti-tech backlash is very real. It is reflected in everything from opposition to data centers to mythological issues with Flock.

What you are seeing is Republicans trying to do a routine where they support data centers but also try to find ways to rhetorically oppose them. That’s because populism is the idea that the people are always right.

But sometimes the people are wrong. The idea that we have to humor everybody in their opposition to data centers is a bad idea, because what you’re actually doing is incentivizing people to stop developing technologies that could theoretically save the economy.

Our politicians keep telling us that the way to fix the economy is not through deregulation or through innovation, but through government subsidies and regulation. This is from politicians on both sides of the aisle. They erect straw men to argue for government involvement in the economy, when in reality, innovation and free markets are the only way out.

That does not mean that capitalism is all pure joy, because when there is creative destruction, when you build something new, the old thing basically falls apart.

But that is also the only road to productivity and future growth and better things and better lifestyles and yes, supporting gigantic welfare states.

Our fiscal house is on fire, and we’ve already decided that, as a country, we’re not going to put out that fire by restructuring our entitlements. We are not going to put water on that fire. We are going to lock all the doors and bar all the windows and burn alive in the house, because we know that if we open the windows or open the doors, that might mean technological developments that we can’t control.

This brings us to our fourth story – challenges on the foreign front. According to the Associated Press, on Wednesday the European Union weighed how to best respond to an attempted drone attack at a German airport blamed on Russia, but struggled to find new ways to meet the challenge without resorting to military means.

Shocker: When people attack you, you sometimes have to use your military.

Meanwhile, the leader of the UK Conservative Party says that Russia could certainly attack NATO countries by 2030.

Russia is pushing back against NATO, believing the United States won’t respond. In addition, the Chinese are harassing Japan.

Here’s the point: Our enemies sense our weakness. They believe we’re vulnerable, and they’re challenging us because of it.

What’s the reason for that? We made ourselves vulnerable by funding our entire welfare state on the basis of debt. China owns about $600 billion of our bonds. If they threaten to sell them tomorrow, guess what happens to the bond markets? They crater even further.

Russia and China and Iran, all of our enemies, are banking on something else: that the United States makes the same choice that the British Empire once made, to embrace declining welfarism instead of economic and military health.

Empires typically die because they run out of money. But that can happen in a couple of ways. Before the advent of democracy and capitalism, empires were very largely supported by their imperialism. You invaded a state, stripped it of its resources, and brought them back home. Then they overextended and ran out of money.

Since the advent of democratic capitalism, empires chose suicide by welfarism. The British Empire was a great example of this. The sun never set on it as it presided over territories literally all across the world. But after World Wars I and II, the U.K. basically decided to trade in a template for welfarism at home. The U.K. is now, at best, a second-rate power.

Populism is about telling you this lie: You never have to make a choice. You can have everything. You can have no innovation and high welfare rates. You can have a strong military without having to pay for it. Nothing will ever come home to roost.

What’s happening is that there are a lot of people on all sides who are perfectly willing to give up on American global leadership, destroy the freedom of the seas, facilitate the rise of Russia and China, and do it all in the name of a corrupt, bankrupt welfare state that will run out of money and throttle the economy sooner rather than later.

I know it’s depressing, but this is why we need to speak truth here.

The Founders knew all this; they knew their history. Read the Federalist Papers. References to Roman history abound; they would have been appalled by all of this. It’s why they opposed governmental welfare on a federal level. It’s why governmental welfare is not a delegated power of the federal government.

It’s also why they opposed the rule of the mob, because they knew that if you have three guys in a room and two vote to rob the other guy, that is not okay.

And they knew that the rule of the mob, welfarism, and decline are two sides of the same coin.

James Madison said, “I go on the principle that a public debt is a public curse, and in a republican government more than in any other.” That’s why Benjamin Franklin said, “Think what you do when you run in debt. You give another power over your liberty.” It’s why Jefferson said, “I sincerely believe the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.”

It’s why Washington, in his famous farewell address, advised avoiding accumulating debt by shunning expenses and exerting effort in peacetime to pay off war debts, “not ungenerously throwing upon posterity the burden which we ourselves ought to bear.”

We are fundamentally unserious about politics right now.

There is a uniparty. The only question right now in American politics, when it comes to the future of size and scope of American government, seems to be how we ought to rearrange the deck chairs on the Titanic.

The Democrats want to stack all those deck chairs directly at the front of the boat, in front of the iceberg, and Republicans seem to want to pack them nearer the back of the boat and delay it a little bit.

But nobody is arguing that we ought to change course, even as the Titanic plows into the iceberg, because it turns out all the passengers are cheering.