There is a reckoning on the horizon

[JParis]

If interest rates average two percentage points above the CBO baseline, interest costs on the debt will be equal to 100 percent of tax revenue by 2051, Reidl calculates. Every single dollar of tax revenue (based on the current tax code) would be directed to paying for money already borrowed and spent. That means nothing left over for the military, social programs, entitlements, or anything else.

"Once the debt surges, even modest interest-rate movements can impose stratospheric costs," Riedl says.

It's those stratospheric costs that the Federal Reserve must consider before deciding to raise interest rates. That's not supposed to be part of the Federal Reserve's purview, but years of fiscal profligacy from Congress have created a mess the central bank is ill-suited to solve.

The central bankers may decide that it's better to let inflation run its course than to risk precipitating a debt crisis, but that's a decision that would have dire consequences too. Consumers will pay higher prices, workers will see real wages depressed, and anyone trying to save for retirement will see those savings eaten away by inflation.

For too long, federal policy regarding the national debt has been driven by a sense that the good times would never come to an end. Low inflation and falling interest rates may have lulled politicians into a false sense of security, and poor budgeting left the nation's balance sheet vulnerable to a coming crisis of the government's own making.

https://reason.com/2021/12/30/americas-huge-pile-of-national-debt-makes-combating-inflation-more-difficult/

[CNCAppsJames]

They will kick the can down the road and when all those shitbirds in congress today are long gone and mostly dead the rest of us will be left with the crumbling pieces.

Too bad we can't hold them personally liable. Nazi Pelosi and DiFi, while their fortunes are a drop in the bucket, it would sure be nice to make those old bats and their families homeless and penniless.

[JParis]

They will kick the can down the road and when all those shitbirds in congress today are long gone and mostly dead the rest of us will be left with the crumbling pieces.

I don't know that they can again...they spent so much much money and have kept interest rates so artificially low for so long....that as inflation continues, they are now in a lose/lose situation....

Will they let inflation continue to rise as it is and is expected to continue and accelerate pushing the limits of what "the people" will accept or do they raise interest rates and set the US on a path to complete financial ruin....

It "seems" like we are finally at the moment in time.....

They just don't have any arrows left in the quiver at this point.

[CNCAppsJames]

I never underestimate the ability of a politician to manipulate the economy in ways that will be detrimental to the nation. They will hike the debt ceiling again and again at least until the mid-terms.