Government bonds, long considered the safest investment on earth, are losing value worldwide, and that is bad news for retirees, savers, and anyone who borrows money.

• Long-term U.S. government bonds have lost about half their value since 2020 because years of low rates and heavy borrowing finally caught up with inflation, forcing buyers to demand much higher payouts.
• Big reliable buyers like central banks and Japan are pulling back or selling, so governments have to offer even higher rates to attract new lenders, which pushes borrowing costs up everywhere, including mortgages and credit cards.
• The U.S. now pays more in interest on its debt than it spends on the military, and interest costs are set to become the single largest item in the federal budget within years.
• Britain and France are already seeing political turmoil tied to this — Britain's 2022 mini-crisis toppled a prime minister in weeks, and France is now borrowing more expensively than Italy or Greece.
• Poorer countries like the Maldives and Bolivia are getting hit hardest, facing currency controls and fuel-price shocks, while in the U.S. the wealthiest households keep gaining from rising asset prices as everyday paychecks fall behind inflation.

Outlook: Without a credible plan to control spending or bring rates down, borrowing costs look set to keep climbing, squeezing poorer borrowers and households first while asset owners stay insulated.