(RightWing.org) – Financial experts are warning that the federal government’s out-of-control spending is costing us all money. The massive extra debt created by the Biden administration is an obvious worry for the future because, with the track the US economy is on, we’ll never be able to pay it back. That isn’t the really bad news, though. It turns out all that debt is making life worse already.
On March 21, economist EJ Antoni, who writes for the conservative Heritage Foundation, warned that Biden’s incontinent spending is a major driver behind high interest rates. He explained that when Biden was first elected he funded his expensive policies by getting the Federal Reserve to print money. The result was the 2021-22 inflation crisis, which was completely predictable.
In response, Biden started borrowing the money instead. The federal government does that by selling Treasury bills and other investments. The problem is, if the Treasury wants to sell more of those it has to make them more attractive to the public. It does that by increasing the yield on them — the amount of profit buyers make when the investment matures.
Antoni says the yields on Treasury investments have skyrocketed since Biden took office; many have quadrupled, and some have risen by up to 75 times. That’s a problem because lenders don’t have unlimited money and they want to invest it where it will get them the best return. That means the Treasury is competing with other borrowers — and lenders can demand more in return for their money.
The problem for ordinary Americans is that most of us borrow money. We have mortgages; we have credit cards; we finance cars. If we want to borrow that money we need to pay interest on it — and if the interest is too low, lenders will just lend to the government instead. That means all Biden’s trillion-dollar spending on infrastructure, welfare, and woke projects comes at the cost of more expensive mortgage, card, and loan repayments for everyone else.
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