Debt Interest Bomb
by Kerby Anderson, Contributing Author: Every president leaves the next president with unfinished business. But it appears that President Obama has left a number of time bombs to President Trump. A few come to mind. The inevitable collapse of Obamacare is one. Chemical weapons in Syria is another.
Perhaps the most significant is what the editors of the Wall Street Journal rightly call the “debt interest bomb.” Rising interest payments for the national debt will be a major obstacle for President Trump and Congress to overcome.
Over the last eight years, President Obama and Congress managed to nearly double the national debt. What made it less painful was the reality that the monetary policies of the Federal Reserve keep interest rates near zero. That is no longer the case.
Peter Schiff has been on my radio program in the past, and he is now predicting that: “the debt bomb is going to explode.” In fact, he thinks the Federal Reserve “is going to try to inflate its way out of this problem, but it’s going to inflate its way into a bigger one.” Low interest rates allowed the federal government to service its debt, but now much more money will be needed to do so, simply because interest rates will be higher. He predicts that as interest rates rise and inflation grows, creditors are going to demand a higher premium.
This debt interest bomb is about to explode all over President Trump and Congress at the very time when they want to reform the tax code and reduce the size and scope of the government. If you think about it, we have seen this before. All we have to do is look back eight years to the housing crisis. Many Americans faced financial ruin because they bought homes they couldn’t afford. They were lured by low interest rates but eventually faced higher mortgage payments.
I think President Obama may be very glad he could leave town before interest rates rose. That way he could leave the tab for President Trump and Congress to try to pay.
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Kerby Anderson is a radio talk show host heard on numerous stations via the Point of View Network endorsed by Dr. Bill Smith, Editor, ARRA News Service
Tags: Kerby Anderson, Viewpoints, Point of View, Debt Interest Bomb, To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service and "Like" Facebook Page - Thanks!
Perhaps the most significant is what the editors of the Wall Street Journal rightly call the “debt interest bomb.” Rising interest payments for the national debt will be a major obstacle for President Trump and Congress to overcome.
Over the last eight years, President Obama and Congress managed to nearly double the national debt. What made it less painful was the reality that the monetary policies of the Federal Reserve keep interest rates near zero. That is no longer the case.
Peter Schiff has been on my radio program in the past, and he is now predicting that: “the debt bomb is going to explode.” In fact, he thinks the Federal Reserve “is going to try to inflate its way out of this problem, but it’s going to inflate its way into a bigger one.” Low interest rates allowed the federal government to service its debt, but now much more money will be needed to do so, simply because interest rates will be higher. He predicts that as interest rates rise and inflation grows, creditors are going to demand a higher premium.
This debt interest bomb is about to explode all over President Trump and Congress at the very time when they want to reform the tax code and reduce the size and scope of the government. If you think about it, we have seen this before. All we have to do is look back eight years to the housing crisis. Many Americans faced financial ruin because they bought homes they couldn’t afford. They were lured by low interest rates but eventually faced higher mortgage payments.
I think President Obama may be very glad he could leave town before interest rates rose. That way he could leave the tab for President Trump and Congress to try to pay.
-----------
Kerby Anderson is a radio talk show host heard on numerous stations via the Point of View Network endorsed by Dr. Bill Smith, Editor, ARRA News Service
Tags: Kerby Anderson, Viewpoints, Point of View, Debt Interest Bomb, To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service and "Like" Facebook Page - Thanks!
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