The Federal Reserve is setting America up for economic disaster

[Free Vulcan]

The unwieldy national debt also causes friction for entrepreneurs. Governments have sought to increase taxes, regulations and fees on entrepreneurial activity in order to service the ballooning debt. This has sucked critical capital out of the system that entrepreneurs need in order to grow businesses and drive employment. With consumers still reeling from the great recession, demand for goods and services is lagging employment growth by a significant margin, further constraining opportunities for entrepreneurs.

The great project to rescue the American economy by the Fed has hit an obvious wall. The debt it used to goose the economy is now gumming up the system and constraining real growth. The looming question of what actually happens when the debt bubble finally bursts is one that not even the soberest economists at the Fed have been able to confront effectively. Unless we deal finally with the false notion that "central economic planning" can replace actual capitalism as the driver of American growth, we may be in store for far, far worse.

Read more at: http://thehill.com/opinion/finance/351153-the-federal-reserve-is-setting-america-up-for-economic-disaster

[LMAO]

Your average citizen is blissfully ignorant of the ramifications of our burgeoning debt

[Free Vulcan]

The interesting question is what the Fed will do if the the economy gains real steam or inflation starts getting out of hand, and they are forced to raise rates. They can't go that far without substantially affecting how much of our tax revenues goes to interest.

5% sustained for a few years will take about a quarter of the current revenue, which would start putting a serious crimp on things. They are pretty well boxed into a corner.

[IsailedawayfromFR]

with $20 trillion in debt,  a 1% raise in rates costs an extra $200 billion per year in interest.

Those are really big numbers.

Under Jimmy Carter, we had federal funds rate of up to 15.5%. That would be another +$2 trillion in interest.