The Growing Burden of Interest Payments

The chapter discusses the concerning trajectory of increasing interest payments faced by the United States due to high debts and deficits, highlighting the risk of interest on the debt surpassing major budget items. It delves into the concept of fiscal dominance, explaining the detrimental cycle of widening deficits and skyrocketing interest payments. The conversation also explores the implications of zero interest rate policy, challenges in securing long-term loans, and the Federal Reserve's predicament in changing monetary policies.