Former Treasury Secretary Urges Emergency Plan to Prevent a Devastating U.S. Debt Crisis
Washington, Friday, 17 April 2026.
With the national debt at $38.9 trillion, Henry Paulson warns that a collapse in demand for U.S. bonds would trigger a vicious crisis harder to contain than 2008.
The Threat of a Sovereign Debt ‘Doom Loop’
On Thursday, April 16, 2026, former Treasury Secretary Henry Paulson appeared on Bloomberg Television’s Wall Street Week to deliver a sobering message to U.S. policymakers: prepare a short-term, targeted “break-the-glass” contingency plan before a collapse in demand for government debt forces their hand [1][2][3][5]. It remains unclear whether current policymakers have already begun drafting such emergency measures [alert! ‘Source material indicates uncertainty regarding the current status of government contingency plans’]. The U.S. Treasury market operates as the bedrock of the global financial system, where the 10-year Treasury yield serves as a foundational benchmark interest rate [2]. However, concerns over the sustainability of this sovereign debt are escalating [2]. While the total U.S. national debt stands at a staggering $38.9 trillion as of mid-April 2026 [2], the specific public market for U.S. government debt is cited at $31 trillion [4], leaving a difference of 7.9 trillion that is typically composed of intragovernmental holdings [GPT].