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What Are The Dangers Of Too Much Debt?

A 1% increase in interest rates will cost as much as the Iraq war.

submitted by: AntEconomist
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What Are The Dangers Of Too Much Debt?. A 1% increase in interest rates will cost as much as the Iraq war.
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Hits: 6799 | Favorites: 1 | Emailed: 1 | Rating: 2.8 | Category: News & Politics | Date: 03/21/2012
 
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tobyvictory
Male, 70 & Over, Asia
 412 Posts 		Thursday, March 22, 2012 9:16:16 AM
The debt is an issue only during election cycles. All sides blaming the others. Other times mums the word. Except for teabaggers like this douche!
airsofter1
Male, 18-29, Midwest US
 1089 Posts 		Thursday, March 22, 2012 12:43:29 AM
obama: bitch please
HalfPintRoo
Female, 18-29, Eastern US
 2031 Posts 		Wednesday, March 21, 2012 8:57:57 PM
dang007--- so we should do nothing?
AntEconomist
Male, 40-49, Eastern US
 171 Posts 		Wednesday, March 21, 2012 8:47:32 PM
@wiscesq: 10 years ago, you'd have an argument. To take advantage of lower short term rates, the treasury has been rolling long term debt over to short term debt. The result is that the government debt is now highly exposed to short term interest rate changes.
wiscesq
Male, 30-39, Midwest US
 49 Posts 		Wednesday, March 21, 2012 8:24:06 PM
The national debt is too high and is unfair to children and future generations, but this guy's analysis is simply wrong. While the government does refinance its debt to take advantage of decreasing interest rates, there is simply no reason it would refinance its entire debt if interest rates were increasing. New debt might be borrowed at the higher rate, but the interest expenses on the entire existing debt would not go up. If your mortgage rate was 5%, and the market went up to 7%, would you refinance your mortgage at the higher rate?

Neither would the government.
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