Are you concerned about interest rates?

[Lynx122]

It might just be a number going up on a graph but if you remember that there's 40 trillion dollars in dept and every year 2 trillion more get added to it and that debt has to be refinanced with more debt at this higher interest rate then it's pretty brutal.

The crazy part is I read if the bush and trump tax cuts hadn't been done then the debt would only be 48% of gdp instead of over 100 % so less than half of what it is now.

Once you cut taxes you have to borrow more then interest rates go up and borrowing becomes more expensive etc. It becomes a spiral so just a little bit of extra income can make a huge difference over 20, 30, 40 years.

After WW2 the population and the economy exploded, everybody had to build and rebuild there was more demand than could be met so the economy could constantly grow. Now the economy is pretty maxed out and people are fighting over tiny increases. So there is no boom to save anyone. In fact we're already in a bubble, AI bubble, housing bubble etc. Usually in these times debt should be lower so that when the crisis hits the government can stimulate the economy. But the borrowing has been so irresponsible especially since the 2008 crisis, that now there is no room to borrow when the economy gets into trouble.

Personally I think the world will move towards something better when this U. S. Israel world order collapses but it won't be pretty in the transition period that's for sure. It's an interesting time that's for sure. We won't be bored for the next 20 years when it comes to geopolitics.

Are you personally affected by mortagage rates or other kind of loans or are you fine?

[Maybe_Maybe_not]

Every time I try to understand one notion in economics, it tells me that it doesn't work as I think it works, since all concepts seem to work together in a somewhat magical way. So I don't believe I'll ever figure out how global economics work or what they mean at all lol

[Lynx122]

Well sometimes people are deliberately trying to stop the market from reacting how it usually would. Like the U. S. trying to push down the oil price so the Hormuz crisis doesn't seem as bad as it really is. Or sometimes people are just delusional and the market is disconnected from reality as it has been lately. But over time the forces are unavoidable. But if it's not your thing that's fine :) I think it's interesting :P

[Maybe_Maybe_not]

Oh I think it's interesting, my problem is more that there are so many complicated things to figure out in economics, like what explains the value of currency, how stock market seems to create money that doesn't exist, inflation, deflation, interest rates, it's just too much you know. At least it is too much for someone already interested in other complicated stuff lol

[Alex-Snow]

It scares me as well as the increasing national debt under Trumpy

[Lynx122]

It should. You're unlucky that you were born right in time for the whole house of cards to come down. But we can get through anything if we try. I wish you all the best in a bad situation.

[Alex-Snow]

Ty for the mho

[Alex-Snow]

The future does not look bright for people my age with the current administration. Very depressing.

[Anonymous]

most people are affected- lose- on credit cards but i pay full amount each month. and i got a "fixed rate" mortgage- Fixed-Rate Mortgage, the interest rate is locked and is legally guaranteed to remain exactly the same until the loan is fully paid off. Your principal and interest payment will never fluctuate'. about national debt - it will just grow endlessly anyway whether low or hi interest. if trump would pay a trillion or down to 39T- the next democrat will spend ten trillion so paying and worrying are both pointless.

[MrChinaski]

You should be more worried that the Norwegian sovereign wealth fund (oil revenue) just rebalanced out of US government debt into US corporate debt. Not a bet against the US economy. Rather their view is that the risk of government default is under-priced.

[Lynx122]

I'm not concerned bro I live in Switzerland our interest rate is 0.5 % And as I said I think this is gonna be instability and I feel like we will be in a better place when this is over. At least I'm hopeful. Someone could always do something crazy.

[lightbulb27]

globally, yes in terms of how it shifts state budgets, impacts the lowest and middle.

When I was your age, rates were like 10-16%. Granted, USA didn't have 40 trillion debt. It may be impactful to the vicious cycle of money printing, but they've been doing that a long long long time now.

[FreyaRed]

If Nigerian email spam prince promises you 1000% interest annually, will you give this prince a loan?
This is similar with countries who need more for buying bonds back and paying interests than their annual budged. Those countries are plain and simple bankrupt. Interest rates is just mechanic to lure more investors who probably never see their money again.

[Lynx122]

Well the U. S. is heading that way definitely but it's not exactly the same thing. It just depends how big is the debt and how high is the interest rate. A government can have a certain amount of debt and it's easily manageable. It just becomes a problem when there is no responsibility and no effective mechanism of managing the debt. Yes interest rates do go up when people are less willing to buy and trust sinks but 5.3% is not yet a catastrophy it's just the lack of any kind of plan which means the debt will keep rising and the interest rate will as well. But you can buy a swiss bond that will pay you 0.6% interest and you'll get your money back guaranteed ;) You just won't make much money lol.

[Shiprex]

Not really. My mortgage is pretty low and the banks here allow you regular adjustments to the repayment schedules

[duntoldya]

the spending has to stop period or we collapse as a country. neither party wants to tackle it. because the morons immediately cry that you're killing babies.

[andreasderjuengere]

My only ''interest'' is to keep money business as far from me as possible.

[exitseven]

I have a considerable amount of money tied up in a CD. It would be good if interest rates went up. I remember years ago getting a CD at 10.5%

[Lynx122]

Well if this crisis continues the banks will be affected as well. The dollar will be affected. This is not just a bump in the road. It's hard to judge the exact timeline but Trump is definitely accelerating the decline of the U. S. Politicians usually just want to manage the current situation so they don't get blamed for any deteriorating conditions. But Trump has been so hostile he's forced the whole world to turn away from the U. S. and diversify their trade, their defense, their supply chains. It's gonna be a very interesting time.

[exitseven]

The economy is thriving. GDP in the second quarter was revised to 2.2% which was higher than expected. It is expected to be 5% in the third quarter, Wages are up unemployment is down. Inflation has been rising since oil prices have risen but it will be a temporary condition tied to the war in Iran. Then the Fed can lower interest rates.

[Kelly6]

@Lynx122 US public is never concern about their own well being. They are only concerned about other countries specially Israel.

[NathanDavis]

not really, no