Former US Treasury Secretary Paulson calls for contingency plans to address the collapse of US bond demand Golden Finance reported that on April 17, former US Treasury Secretary Paulson called on the US government to develop an alternative plan to prevent the collapse of US treasury bond demand. He warned that this situation would have an "extremely serious" impact. Paulson said, "We need an emergency response plan that is targeted and short-term, and well prepared in advance. Once it reaches a critical point, it can be activated." Paulson said that if the $31 trillion US Treasury market fails, its nature will be different from the financial crisis he dealt with during his tenure twenty years ago. "At that time, the situation was very bad, but the government still had the fiscal space to deal with the credit crisis. But if the U.S. public debt crisis hit the critical point, when trying to issue treasury bond bonds, only the Federal Reserve was the buyer, and the price of treasury bond bonds fell and interest rates rose, which would be a very dangerous situation." For many years, U.S. budget experts have warned that there might be a "doom cycle": as the scale of government debt continues to expand, investors demand higher yields, thereby pushing up government interest spending and further expanding the fiscal deficit. In extreme cases, if the Treasury cannot raise enough funds to pay interest or principal, the market generally believes that the Federal Reserve will have to intervene as an emergency buyer. Paulson said, "Once it happens, the impact will be very severe, so we must be prepared for this possibility