Government bonds: financial disaster

In the June Market Watch article, we discussed the possibility of a bond market crash. Since then, yields on bonds have zoomed. Bond prices have dropped dramatically. Government bonds are decreasing in value because the public is unwilling to take interest payments of 1.5% to 2% annually for the risk of holding government debt. Bond buyers are aware of the fact that U.S. spending is much more than tax revenues. They see the market can no longer sustain such borrowing to support government spending.