In the not-too-distant past, the national debt surpassing $31 trillion would have raised more than a few eyebrows. Now, it seems like everyone’s gone blind to America’s fiscal woes.
Democrats and Republicans alike have been hard at work enacting fiscally irresponsible policies for years. These politicians continue to look away, refusing to see the problem for what it is.
Luckily, some sensible economists are sounding the alarm. Brian Riedl of the Manhattan Institute has long maintained that our profligacy was unsustainable because the costs of servicing the debt would eventually increase as interest rates rise. He believes that the chickens are coming home to roost.
“Basically, Washington has engaged in a long-term debt spree and been fortunate to be bailed out by low-interest rates up to this point,” Riedl said. “But the Treasury never locked in those low rates long term, and now rising rates may collide with that escalating debt with horribly expensive results.”
Bottom-line: the party’s over. Current levels of federal borrowing are completely untenable. America’s flirtation with Modern Monetary Theory must come to an end.
And we better course correct quickly. Otherwise, we might soon be staring down the barrel of a debt crisis.