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19-04-2024, 09:46 PM
Okay this professor who has studied the problem explains the dynamics well
1. As the US debt grows it need to auction more treasuries to pay the debt.
2. The market will demand higher and higher interest to buy the treasuries.
3. The high interest means the risk free rate will be elevated ....and interest hike will kill off the economy.
4. Right now it is not certain when all this will happen but it is bound to happen before debt hitsb200% of GDP
1. As the US debt grows it need to auction more treasuries to pay the debt.
2. The market will demand higher and higher interest to buy the treasuries.
3. The high interest means the risk free rate will be elevated ....and interest hike will kill off the economy.
4. Right now it is not certain when all this will happen but it is bound to happen before debt hitsb200% of GDP
I, being poor, have only my dreams; I have spread my dreams under your feet; Tread softly because you tread on my dreams.
