Even small moves in interest rates can have big impacts on deficits., holding over 4.5% for nearly two weeks. Their climb accelerated in recent weeks after the Fed signaled it would raise rates once more before the end of the year. Investors are also grappling with signs that the central bank will keep rates higher for longer as the Fed struggles to yank inflation down to its 2% target.
The last time the US had interest rates and Treasury yields this high the debt to GDP ratio was a third of the size, said Andrew Lautz, a senior policy analyst at the Bipartisan Policy Center, a think tank which updates a monthly deficit tracker. "So our debt situation is almost three times as worse. That is going to make it massively more expensive to handle the current debt burden and significantly increase the cost we pay for it.
“At some point in the future, if we don’t change something, then it’s unsustainable. It just won’t work," said Mark Zandi, chief economist at Moody’s Analytics. Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, a Washington think tank, pointed to an array of policies to combat Washington's fiscal challenges, including tax reform, raising the retirement age and changes to immigration policy. "We can't grow our way out of this but growth can help us get out of this," he said.
Regarding that low-cost borrowing as a free pass was "a huge error that we are paying for," Goldwein said. Prime Minister Justin Trudeau's Easter weekend vacation in Montana cost taxpayers nearly a quarter of a million dollars, CBC News has learned — far more than the sum reported to Parliament.The price tag for the April 6-10 trip comes to more than $228,839, once the costs carried by the Canadian Armed Forces, the Privy Council Office and the RCMP are included.
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