The Corner

Obama’s Budget and Interest Rates

Maybe Vero, Kevin, Larry, Ramesh, Yuval or one of our other experts knows that answer to this one. What assumptions does President Obama’s proposed budget make about interest rates? Does he assume we are going to continue record low rates throughout the next decade? The James Pethokoukis analysis that Larry referred to notes that the president is laughably assuming that economic growth will shoot up to 3.4 percent in 2015 and then hover around 4 percent for years afterwards. Is the administration similarly assuming that the artificially low interest rates will go on forever? What happens to the debt if, say, interest rates inched up closer to historic norms? 


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