In just two weeks, Donald Trump has done something no one ever expected which he may not even intend:  overturning the axiomatic expectation that a full-faith-and-credit obligation of the United States government is the best there is.  Now, the U.S. will honor its commitments only if it still likes them.  Anything that upends financial-market axioms stokes systemic risk and stoking is now so heated that it threatens even the multi-trillion Treasury market on which U.S. prosperity and global financial stability depend.

Is this alarmist?  Yes, but then who would have thought the White House would issue an edict freezing all federal funding or maybe just some federal funding even though more than just some federal funding was frozen?  Who would have thought the U.S. would cease all but a very few foreign-aid payments including those with other sovereign governments no matter which geopolitical or humanitarian interests are sacrificed? Even if some of this was audible on the campaign trail, none of it was thinkable to anyone counting on constitutional checks and balances along with a sound sense by someone in the White House of second-order effects.

It is in this context that one more Trump Administration action is particularly worrisome and why I fear even for the once-sacrosanct promise that the U.S. will not just honor its commitments, but also pay its bills.  Elon Musk’s acolytes at DOGE have now been granted unfettered access to the Treasury payment system.  Why?

Maybe it’s just curiosity or maybe DOGE wants to update Treasury’s antiquated technology systems to tackle the fraud and abuse Mr. Musk reportedly targets.  That makes sense, but so pallid a goal seems unlikely so soon in a White House prioritizing so much that is far more radical and expressly political.

What DOGE thinks wasteful may also be a payment the U.S. is obligated to make.  What DOGE thinks abusive may be as political as many other recent calls and also have as little to do with what were once considered express payment obligations.  Where does honoring Treasury-bond obligations fit into this uncertain framework?  We don’t know, but finding out could prove thoroughly frightening.

DOGE has reportedly been given “read-only” access for now, but how long will this discretionary guardrail stand?  Political operatives may well fancy manipulating Treasury-bond payments as a new way to balance the budget, handle a debt-ceiling crisis, or add a new form of trade sanction.  Why not just block Treasury-bond payments to central banks housed in governments the U.S. no longer likes?

Scott Bessent is a Treasury Secretary who seems to know better than to deploy Treasury obligations in trade, political, or geopolitical vendettas.  But he may also be a Treasury Secretary DOGE forgets to ask.  The global financial order may be the only pillar of the global economic order this White House fears to touch, but assuming it knows how much damage it might do is assuming far too much given how much pleasure this White House appears to take when it tosses cluster bombs into once-unquestioned U.S. commitments.

In recent decades, only two nations – Nicaragua and Iran – that could have paid their sovereign obligations decided not to do so.  Although each nation was small from a financial-market perspective, this decision sparked a decades-long financial crisis that undercut U.S. growth and heightened inflation.  There was no payment-system crisis, but the financial markets then moved a lot more slowly.  Now, even a hint of missed Treasury obligations is sure to throw critical markets into immediate disarray.

America is indeed first not only in Mr. Trump’s policies, but also in the global financial system.  Any American effrontery will thus prove far more destabilizing than anything ever seen before.  That is very dangerous indeed.