[ZachPruckowski]

Interest rates are where they were in the mid/late 90s (https://fred.stlouisfed.org/series/FEDFUNDS). The idea that these interest rates are unsustainable/dangerous is just silly. If anything, the 2009-2016 and 2020-2021 periods at an interest rate of 0% are the anomalies.

[InTheArena]

The problem is is that the amount of debt is percentage of GDP, and therefore the interest rates that we need to pay are significantly higher now. This kind of analysis is hopelessly naïve without taking into account overall macro situation.

[makestuff]

I always see people say the national debt doesn’t matter because it isn’t like household debt. However, I just fail to see how that is true. At some point the can won’t be able to be kicked down the road anymore. I guess everyone is hoping that it won’t be during their lifetime.

[admax88qqq]

Because fundamentally the US government can print money to pay US debt.

You can't print money to pay off your household debt.

It's a different beast altogether subject to entirely different rules and incentives than household debt.

[fwungy]

Yes, and we the taxpayers get the privilege of paying interest on the money that is printed based on our nation's creditworthiness.

The debt can never be paid. It's by design.

[fundad]

With tax revenue on growing wages.

[joemazerino]

Printing money results in inflation. That was my original point.

[admax88qqq]

My point is just that national debt is more complicated than household debt. And every attempt to reduce it to household debt is flawed. They are fundamentally different.

[lmm]

> At some point the can won’t be able to be kicked down the road anymore.

No country other than New Zeeland bothers to properly account for the asset side of the national budget. Increasing liabilities is fine if there's a corresponding increase in assets. But most countries are basically guessing about the second half. (This is also why we see so many wasteful privatisations where national assets are sold off for way less than they're worth)

[InTheArena]

People still hold to Soviet style, Socialism/communism, why would you be surprised if they’re still holding on to modern monetary theory?

[ZachPruckowski]

I mean, yeah, that's ultimately a potential problem for the federal budget. But that's not what tripped up SVB - long-term Treasury prices declined because higher interest rates made short-term Treasuries more attractive than long-term ones.

[InTheArena]

Which in turn would not be a problem if the amount of data issued didn’t swamp at destroy the market for debt already on the books…

[fallingknife]

Too bad debt/GDP isn't https://fred.stlouisfed.org/series/GFDGDPA188S