For every 1% increase in the Fed rate, it means $310 billion dollars per year in additional interest payments. Now, that isn’t going to happen tomorrow—but as the government rolls their debt it will accumulate.
And the Fed rate has gone up a lot in the part 15 months.
It will happen slowly…then all at once.
It’s the same as buying a new car, then trading it in next year for another new car without paying off the loan for the first new car. They just roll that debt into the cost of the newer car.
Then doing it again the next year, and the next and the next, ad infinitum.
The only problem is that banks and loan companies will not do that more that once or twice, since the cost of the loan will out pace the value of the car.
I had a friend do this for three new cars and he wound up owing more in previous loan rollovers than the car costed and he eventually had to declare bankruptcy.
The only brake the Congress has is the voters, and the Dem voters are financially ignorant morons...................