The US government is borrowing on the “teaser rate”, one observer said, like the low mortgage rate on a floating rate mortgage yet to adjust upward…scary days ahead.
Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.
The US is not alone. The story is similar in Europe and worse in Japan. But they are self-funding at the moment. The US is not, and thus more vulnerable near-term.
