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What is this going to do to interest payments on the national debt? Will this put a squeeze on spending? Cause tax increases? Or will it be business as usual
by narrator 11y ago
What is this going to do to interest payments on the national debt? Will this put a squeeze on spending? Cause tax increases? Or will it be business as usual and the fed buy as many bonds as needed?
In the latter case, I think that will cause inflation to pick up unless we can export it all out the trade deficit.
- dragonwriter 11y ago> What is this going to do to interest payments on the national debt? Will this put a squeeze on spending? Cause tax increases? Spending and taxes are driven by political decisions which can remain extremely distant from any clear relation to the market for quite a long time, so the effect a rate hike like this has on fiscal policy is (even after the fact) murky at best -- even once we know future policy, there will be as many theories as observers as to the contribution of monetary circumstances to those policies.