That's because the federal interest expense increases as interest rates rise.
As the federal interest expense rises, so does the budget deficit.
Even according to the US government's rosy projections, the interest expense on the federal debt will exceed $1 trillion for the first time in 2024 and it shows no sign of slowing down.
The US government projects that the federal interest expense will exceed $1 trillion in 2024 for the first time.
The US government is now borrowing money to pay interest on the federal debt, which has a compounding effect as the federal debt and interest expense grow exponentially.
Allowing interest rates to rise high enough to entice natural buyers would bankrupt the US government because of the higher interest costs, which are set to become the largest item in the budget.
If higher interest rates are off the table and cannot entice more natural buyers, who will finance these growing multi-trillion dollar budget deficits? The only entity capable is the Federal Reserve, which buys Treasuries with dollars it creates out of thin air.
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