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Inflation occurs when there are too many dollar chasing too few goods...thus boomtime. The only reason the fed didnt increase interest rates more than 1/4% is because it would drive up the interest payments on our $30T debt too much. Experts say the fed will increase rates by very small amounts 11 times in the next 18 months to try to slow down this overheated economy.
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Reading this made me think, and hope others see the huge problem.
The Government has more debt than all of us consumers COMBINED. The government has more debt than our annual US GDP.
https://fred.stlouisfed.org/series/gfdegdq188S
And, as hinted at above, unlike our ~17T in mortgage debt, which is almost all at FIXED rates for 15-30 years, the government borrows at much shorter terms - max 1 year. As noted, "we" can't afford for the rates to increase significantly.
When you finance a house or a car, your payment is (relatively) fixed for the life of that loan. And we don't worry that our mortgage is 3-5x our annual income, because it is fixed, because we need housing and transportation, and because we have more than that 3-5 years to pay it back.
Now, imagine having credit card balances equal to your annual income. That would be truly frightening. Sure, today the variable rate on your card is OK ... but if all you do is pay the minimum, then an increase in rates would become more and more expensive - and you wouldn't ever be paying off that credit card that was used for restaurants, groceries, vacations, clothes that you bought 3 years ago that you no longer wear.
So, for the "government" whose past bills are the same size as the entire economy, the growth in GDP every year HAS TO exceed the interest rate, or we'll just continue losing ground.
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