Re:Is the Fed creating a housing bubble by keeping rates low?
by justinzollars on Monday August 30, 2021 @09:36PM
(#28363039)
Rates are impossible to normalize.
I calculated the interest on our debt of 28.6 Trillion [1] at a rate of 1.5% to be 429 Billion of interest. This is Approximately what we are paying today [1]. If we normalize to say 5%, which is the historic average [2], paying only the interest on our debt, we would be paying 1.5 trillion each year. Or 50% of the federal budget on interest. We have 3.42 trillion in revenue.
I don't see how we can raise rates, so housing prices could keep going up.
I calculated the interest on our debt of 28.6 Trillion [1] at a rate of 1.5% to be 429 Billion of interest. This is Approximately what we are paying today [1]. If we normalize to say 5%, which is the historic average [2], paying only the interest on our debt, we would be paying 1.5 trillion each year. Or 50% of the federal budget on interest. We have 3.42 trillion in revenue.
I don't see how we can raise rates, so housing prices could keep going up.