There is a brewing crisis, which, if it develops as seems inevitable, has the potential of reducing all of the drama of the early Obama administration to child’s play beginning next year. Only this time, it will be the government’s crisis, not the nation’s.
The New York Times recently noted that the government has gone on what the Concord Coalition’s Robert Bixby calls a “teaser rate” borrowing binge, at an interest rate approaching … zero. Rates will rise, substantially, and soon. (The Treasury Department already is attempting to lock in rates on longer-term borrowing– already driving its short-term costs up.)
How bad could this be? So glad you asked.
The federal government currently pays, according the article, $202 billion a year in interest. White House estimates that interest payments will rise to $700 billion a year in 2019.
We should be so lucky.