On The Market Interest Rates Could Snowball as US Debt Begins to “Spiral”
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Jun 16, 2025 Rising interest rates are tightening their grip on the housing market and U.S. national debt. The discussion uncovers how national debt exceeding GDP raises red flags for housing prices and mortgage rates. Historical trends are analyzed, showcasing how political dynamics influence this debt trajectory. Experts share concerns about soaring interest payments and their implications for future investments. Listeners can glean valuable insights into potential scenarios impacting real estate decision-making.
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Debt Exceeds GDP and Grows Costly
- The national debt exceeds the US GDP, a situation not seen outside wartime since WWII.
- Interest payments now consume over 10% of the federal budget, straining resources beyond essential services.
Both Parties Fuel Debt Growth
- Both political parties have historically contributed roughly equally to increasing the national debt.
- Republicans mainly increase debt by lowering taxes; Democrats by increasing government spending.
Rising Rates Raise Debt Costs
- Rising interest rates have increased the government's cost to borrow substantially from 2-3% to over 4%.
- Higher borrowing costs lead to larger interest expenses which reduce funds for other government priorities.