Shai Akabas, executive director of the economic policy program at the Bipartisan Policy Center, noted, "It's clear the current amount of debt is putting upward pressure on interest rates, including mortgage rates for instance. The cost of housing and groceries is going to be increasingly felt by households in a way that are going to adversely affect our economic prospects in the future."
Akabas stressed that the debt service is already starting to crowd out government spending on basic needs such as infrastructure and education. About 1 in 5 dollars spent by the government are now repaying investors for borrowed money, instead of enabling investments in future economic growth.
Trump's efforts to renew his 2017 tax cuts are complicated by the high debt service costs and the total debt, which could push interest rates higher, making debt service even costlier.
In his statement on choosing billionaire investor Scott Bessent as his treasury secretary, Trump said Bessent would "help curb the unsustainable path of Federal Debt" highlighting the urgency of addressing the debt issue.
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