Interest rates did not stay at 2%. Interest rates have risen dramatically thanks to the inflation caused by those who placed politics above common sense. Inflation has been the ruin of many countries. It is not a recent phenomenon despite what crazy Joy Reid would have one believe. Who can forget the Jimmy Carter inflation? In history we read about the inflation in Germany in the early 1920’s before the rise of Hitler. We have heard about inflation in Venezuela and other countries taken over by communists over the years. Inflation is real. It has been the result of irresponsible government officials for years. It comes about when the thirst for power of politicians exceeds common sense and sound fiscal policy.
This happened in the United States. The Democrats have claimed wrongly that government deficits and government debt is a good thing and brings about growth. No, it brings about inflation which brings higher interest rates. As the deficits increase, the debt increases, and the cost of that debt is a factor that determines the size of the debt and the cost of the debt, or the interest attached to that debt. This is not a new concept. It has existed from the beginning of time.
One might say, as did Obama’s good friend Jeremiah Wright, “the chickens have come home to roost.” Our irresponsible politicians have grown our debt to well over $30 trillion. Nobody really knows how big that is, but we do know that the cost of that debt has risen dramatically because of the increase in the debt and is now rising due to the rapid rise in interest rates.
“The federal government spent $475 billion on net interest payments to service the national debt during the last fiscal year, according to a report from the Treasury Department, surpassing the $425 billion in total revenue received from corporate income taxes and the combined value of both veterans’ benefits and transportation. Moody’s Analytics forecasts that interest payments could surpass defense spending, which amounted to $767 billion last year, by 2025 or 2026 as interest rates and borrowing continue to soar.”
There are four possible solutions to handling this problem; the country could declare bankruptcy, inflation could be increased so the debt would be paid for with dollars of far less value, taxes could be greatly increased, or the politicians could become responsible, spend far less, and generate surpluses that would be used to reduce the deficit.
Of these four choices, the last is the least likely to happen. It requires responsibility on both the part of the politicians and the people. It is irresponsibility that has brought us to this point and responsibility to correct the problem is highly unlikely.
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