Rufus Miles's commentary in In Focus suggests that Treasury Secretary Scott Bessent, who previously made a fortune by betting against flawed government policies, now appears to be implementing similar policies himself. This article highlights how Bessent was instrumental in helping George Soros profit from the UK’s failed defense of the pound sterling in 1992. It further criticizes current U.S. economic policies under President Trump, particularly regarding budget deficits and trade tariffs, which are projected by the Congressional Budget Office to lead to a public debt exceeding 107% of GDP by 2029. This situation is exacerbated by foreign nations’ decreased trust in U.S. financial stability, as seen in actions like central banks withdrawing gold deposits and selling Treasury bonds.
Written by the local model on 2026-09-14,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
In Focus delivers deeper coverage of the political, cultural, and ideological issues shaping America.
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Focus → deliver → America
Published daily by senior writers and experts, these in-depth pieces go beyond the headlines to give readers the full picture.
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pieces → publish → picture
You can find our full list of In Focus pieces here.
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Rufus Miles, an American government administrator, famously said that where you stand on an issue depends on where you sit.
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you → say → issue
This aphorism seems all too true of Treasury Secretary Scott Bessent.
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aphorism → seem → Bessent
As a young man, Bessent made his reputation and fortune as one of George Soros’s traders by taking advantage of governments’ economic policy mistakes.
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Bessent → make → mistakes
Today, as treasury secretary, he is committing the same sort of economic policy mistakes that other economic policymakers have made.
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policymakers → commit → that
That is creating the trading opportunities for today’s hedge fund traders that he was once so ready to exploit.
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he → create → that
In 1992, the United Kingdom spent much money and effort to try to defend a grossly overvalued and indefensible pound sterling.
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Kingdom → spend → sterling
Bessent helped Soros take advantage of this situation by making huge bets against the pound.
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Bessent → help → pound
This all ended on so-called Black Wednesday when the U.K. was forced to abandon its defense of the pound and let the currency depreciate.
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currency → end → pound
That day is now referred to as the day that Soros made $1 billion by breaking the Bank of England.
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Soros → refer → England
If in 1992, the U.K. made the gross economic policy mistake of trying to defend an overvalued currency, today, Bessent is going along with economic policies that are making the country’s public finances even more unsustainable than those President Donald Trump inherited from Joe Biden.
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Trump → make → Biden
According to the nonpartisan Congressional Budget Office, as a result of Trump’s One Big Beautiful Bill Act, the budget deficit will remain at above $2 trillion, or a staggering 6% of GDP.
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deficit → accord → GDP
In turn, that is putting the public debt on the path to reach 107% of GDP by 2029 or a level higher than that reached at the end of World War II.
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that → put → II
A factor that is making our current budget situation all the more worrying is that it is occurring at a time of full employment, when our budget should be more in balance.
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budget → make → balance
Yet another economic policy mistake Bessent is making is going along with Trump’s chaotic import tariff policy.
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Bessent → make → policy
That policy has included imposing punitive import tariffs on our traditional allies such as Canada and Brazil.
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policy → include → Canada
Those policies, coupled with the freezing of Iranian and Russian dollar assets, are raising questions about the United States’s reliability as an economic partner.
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policies → couple → partner
Recent signs of this distrust have been the French and Dutch central banks’ withdrawal of their New York gold deposits and the announcement by the Norwegian wealth fund that it plans to sell $80 billion of its U.S. Treasury bond holdings.
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it → plan → holdings
Raising questions about our reliability as a creditor is not a good idea for a country that is highly dependent on foreigners to finance our gaping budget deficit.
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that → raise → deficit
It is estimated that foreigners already own $8.5 trillion or about 30% of all U.S. Treasury bonds outstanding.
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foreigners → estimate → bonds
The foreigners’ waning appetite for those bonds is now forcing Bessent to increase his reliance on the highly leveraged and more fickle hedge funds and money market funds to finance the government.
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appetite → wan → government
As foreign appetite for our government’s bonds wanes, our government’s long-term borrowing costs are soaring.
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costs → wan → bonds
The 30-year U.S. Treasury bond yield has now increased to 5.35%, or to a 20-year high.
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yield → increase → high
Meanwhile, the 10-year bond yield is now rapidly approaching the psychologically important 5% level.
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yield → approach → level
That will soon be translated into higher mortgage rates, auto loan rates, and other key borrowing rates.
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In turn, that will pose a serious challenge to the economy and to today’s lofty stock market valuations.
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that → pose → valuations
As a young trader, Bessent would have found laughable the pitiful defense that he is now putting up to keep long-term bond yields from rising further.
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he → find → yields
He is increasing reliance on short-term borrowing, thereby increasing the government’s exposure to the risk of rising interest rates.
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At the same time, he is proposing to buy back $6 billion in long-term bonds or a small fraction of the government’s $2 trillion annual borrowing need.
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he → propose → need
As a young trader, Bessent would surely have known that the only real way to avoid a full-blown bond market crisis would be for the government to make spending cuts and take meaningful revenue-enhancing measures to bring the budget deficit down to a more sustainable level.
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government → know → level
We must hope that, as treasury secretary, he now has the courage to explain to Trump that such action is urgent if we are to avoid a serious economic and financial market crisis.
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we → hope → crisis
American Enterprise Institute senior fellow Desmond Lachman was a deputy director in the International Monetary Fund’s Policy Development and Review Department and the chief emerging-market economic strategist at Salomon Smith Barney.
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