> If FED raised rates a couple percent, US would bankrupt in a few days after. Setting aside the fact that the fed funds rate can only wag the short end of the

> If FED raised rates a couple percent, US would bankrupt in a few days after. Setting aside the fact that the fed funds rate can only wag the short end of the yield curve, I'd like to point something out. If the coupon on ALL issued Treasury debt suddenly went to 10% overnight, then yes, we would be looking at possible solvency issues. But that's not how it works. The coupon the US pays to creditors is fixed until the maturity date of the bond. The average maturity on issued bonds and bills is 69 months. Meaning that open market yields would need to remain at (2*(10-current average yield))% for nearly six years in order to get to that point.