I have seen no evidence that Congress cares about what the bond market thinks. In what scenario do you think the bond market can compel Congress?
> Bond market is in revolt about the national debt and I hear crickets from Washington. You think this would be a crisis. Amazing really.
Some combination of the bond market rejecting Treasuries for other similar investments while also pushing up other debt costs causing excessive failures in interest rate sensitive parts of the economy. Hard to predict when, but it’ll look strikingly familiar to the 2008 GFC I think, the day Bear Stearns collapsed. An event will occur, and there will be a cascading loss of confidence in the bond market. Not a great time when diesel fuel is also at record high prices and will be for at least the next year.
Whether Congress cares does not tell you whether there's a problem. The fact that Congress doesn't care is part of the problem - maybe the biggest part.
Instead of blaming Congress, perhaps blame democracy.
Voters loath austerity, and they support spending.
Watch the experiment happening live in New Zealand elections. Our incumbant conservative party (National) is aiming for a budget at about 30% of GDP. Our progressive party (Labour) wants to increase taxes and increase spending to maybe 33% of GDP.
You can see if voters care about keeping spending in check, because it seems likely to be a central issue of campaigns. Although we have MMP voting so it isn't totally clear. Also note that I think most of our politicians would be seen as left-wing if looked at by anyone on the right.