by Wolf Richter
Wolf Street
Higher rates eventually enforce a sort of discipline on the drunken party in government and even in the private sector. That would be a good thing.
There has been a lot of hand-wringing recently among the tightening deniers. They’re now saying, in their latest barrage, that the Fed can never raise its policy rates above x%, such as 2% or whatever, because the government can never pay those higher interest rates on its huge debt and will go bankrupt. And look, they say, interest payments already jumped, and no way that the government can pay much more than that.