Usually, the esoteric inner workings of finance and the very public stakes of government spending are viewed as separate spheres. Normally, bond trading is a neat arena driven by mechanical bets about where the economy and interest rates will be months or years from now. However, this year, there was a chaotic battle waged by traders in the nearly $27 trillion Treasury bond market – the place where the U.S. government goes to borrow.

In the summer and fall, investors worried about federal deficits rising so rapidly that the government would flood the market with Treasury debt that would be met with meager demand and erode the future returns on any U.S. bonds they bought. They believed that deficits were a key source of inflation that would erode future returns on any U.S. bonds they bought. This mindset fueled a “buyers’ strike” in which many traders sold off Treasuries or held back from buying more.

As a result, the yield on the 10-year Treasury note – the benchmark interest rate the government pays – went from just above 3 percent in March to 5 percent in October, resulting in trillions of dollars in losses for investors who bet on lower bond yields earlier this year.

The debate over public debt is as fierce as ever, echoing, in some ways, an earlier time when the term “bond vigilantes” emerged. Washington is reining in spending; the Federal Reserve is also beginning a new series of interest rate increases to keep inflation at bay. Despite this pressure, other analysts believe that the U.S. government will manage to keep debt payments relatively tame and low. Others, like modern monetary theorists, argue that the U.S. can issue more dollars through debt payments without limitations, without facing the monetary constraints of traditional budgetary concerns.

Overall, advocates on both sides fiercely debate how the government can alleviate concerns over soaring debt.