Senior research fellow Veronique de Rugy illustrates in the graph below how interest rates will soar if current trends continue and lenders realize how risky it is to invest in the American government. By 2084, interests costs could soar to 136 percent of GDP.
How can our government swallow that?
De Rugy warned:
“Large and sustained deficits and debt inevitably cripple economic growth. The money the federal government borrows comes from Americans’ savings. So does the cash that Americans invest in private sector growth. There comes a point where there just aren’t enough savings to satisfy both masters. Unfortunately for economic growth, the government always helps itself first.”