Published June 29, 2022
Inflation is hurting every American’s household budget. Because of poor investment choices by the federal government, it is likely to hurt the nation’s budget, too.
A recent analysis from The Post estimates that the Federal Reserve’s interest rate hikes, meant to counteract inflation, have already raised rates on the basket of federal government bonds by 1.9 percentage points. The federal government will have to “roll over” nearly $7 trillion in publicly held debt between March of this year and March 2023, which will have to be refinanced with new debt. That means the government will pay at least $128 billion more in interest payments over that year than it did last year.
Henry Olsen, a senior fellow at the Ethics and Public Policy Center, studies and provides commentary on American politics. His work focuses on how America’s political order is being upended by populist challenges, from the left and the right. He also studies populism’s impact in other democracies in the developed world.