Many do not understand the implications of US debt service costs rising.
For nearly 20 years, it was effectively free for the US to issue debt as debt service costs were ~1.5%.
Now, debt service costs have doubled to 3% and will rise toward 5% as rates skyrocket.
To put this…
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Many do not understand the implications of US debt service costs rising.
For nearly 20 years, it was effectively free for the US to issue debt as debt service costs were ~1.5%.
Now, debt service costs have doubled to 3% and will rise toward 5% as rates skyrocket.
To put this in perspective, 5% on $33 trillion is ~$1.7 trillion PER YEAR on interest expense.
As deficit spending rises, rates are also rising as the US issues trillions in bonds to cover the deficit.
It's a never ending cycle of borrowing to spend which is driving rates higher and leading to interest expense being 20% of US revenue.
There is no long-term plan.
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