Right. Maybe. The operations of the Fed are very murky in all areas. No simple explanations allowed apparently by the Fed for the hoi polloi.
Do you really believe that we can have any size of debt and it won’t unbalance the monetary system? Forgetting monetization and inflation, at some point the market will say that debt is too high, we won’t buy or we need more interest to make up for the risk. When that higher interest becomes unsustainable . . . inflation or default.
Since the deficit has been rapidly shrinking, I don't fear the deficit will unbalance our system.
Forgetting monetization and inflation,
Let's not, the Fed holds $800 billion in securities. How much new debt was added in the last 7 years? How much did the Fed holdings grow over the same period? You think they're monetizing?
at some point the market will say that debt is too high, we won’t buy or we need more interest to make up for the risk.
Will the 10 year rate rise above today's 4.67% rate? Sure. Will it rise to 6%? Maybe. Would 6% kill our economy? Would 7%? 8%? LOL!
When that higher interest becomes unsustainable . . . inflation or default.
Our $13 trillion economy is going to default on a shrinking (as a % of GDP) deficit? Please.