While the Federal Reserve kept borrowing costs near zero for the decade following the Great Recession, government spending boomed and net interest costs on the national debt more than doubled. Then when COVID-19 hit, the Fed decided to finance the government's decision to inflate the national debt by nearly 40%.
Contrary to the delusions of the Modern Monetary theorists who believed that we could sustain money for nothing forever, the bill has finally come due. In its attempt to quash near-double-digit inflation, the Fed’s interest rate hikes, the fastest since the 1980s, have increased the cost of payments on the federal debt by 41% in the first half of this fiscal year, according to a new release from the nonpartisan Congressional Budget Office.
Despite the problem of endless deficit spending being obvious to some of us, Uncle Sam didn’t hedge against the possibility that by causing inflation, the Fed would be forced to raise rates. Alas, the federal budget deficit reached more than $1 trillion over the last six months, with net interest reaching nearly 7% of all federal outlays this year, according to the United States Office of Management and Budget.
TianaTheFirst potus is already working on legislation to cancel credit card debt......
TianaTheFirst What a disaster 😑