economy
Americans Are Already Paying Dearly for the National Debt
A spendthrift government is raising borrowing costs for everyone.
TL;DR
- The national debt, while often presented with abstract figures, is directly increasing borrowing costs for American families.
- Congressional spending decisions since 2015 have raised Treasury yields, increasing annual mortgage borrowing costs by approximately $2,500 for the median homebuyer.
- Bloated government budgets and waning federal revenues are driving up costs across the board, affecting auto loans, small business loans, and credit card rates.
- Reducing federal deficits, through measures like spending cuts and revenue increases, would help lower prices, a strategy successfully implemented in the 1990s.
- Increased government borrowing demand competes with private borrowers, driving up interest rates for everyone.
- Much recent legislation has contributed to deficit growth, with limited policy shifts toward fiscal responsibility.
- Politically unpopular remedies like higher taxes and spending cuts are needed to address the debt, with options including better IRS funding and reforms to entitlement programs.
- The diffuse costs of deficits are less visible than the specific costs of deficit-reduction policies, making political action challenging.
- Economists need to better communicate the direct impact of deficit spending on everyday costs rather than focusing on abstract debt figures.