>> It is going to take Carteresque level interest rates to slow the mad government spending.
Interest rates won’t do it. It’ll take a bloody political massacre of our dysfunctional Congress plus cutting government employment to the bone, and beyond.
The newly unemployed government class will want to foment revolution, too — you can take that to the bank.
We live in interesting times, and they are about to get interestinger.
Yep when the average interest rate on the current federal debt hits 13 percent it consumes 100% of federal revenue. (Let alone the future debt total at an extra $2 trillion/year deficit). The interest rate on a 10-year treasury bill hit 15% during the Carter years. (Currently running at about 4.44%).
To really stop inflation the general rule is you have to raise the federal funds rate above the (real) inflation rate...like Volcker did in the 1980's to "WIN" (Whip Inflation Now") 😳 That would mean that that J. Powell would have to DOUBLE the current Fed Funds Rate. Not going to happen..."rock/hard place".
Borrowing money is normally cheap, and needs to be for capitalism to work. The whole point of a free market is for capitalist investors to rush in to expand the 1 out of 10 businesses that hit the ball.
The cost of borrowing money becomes expensive when big government realizes it can steal from their captive audiece. Fedzilla has been stealing so long, we've gotten used to it. We now think it is normal. It is not.
If you are married to a credit card big spender, paying down the credit cards is useless. Once it becomes obvious that bankruptcy is the only option, the first thing to do is run up all lines of credit to the max. We've entered that party zone, and there's no going back. Enjoy.