The concern lies with the ballooning cost of paying out all the obligations the federal government has to pay out of it, including interest payments and Social Security and Medicare payments on top of out of control spending.
The hosts discuss why buying bonds may not be the best investment strategy, as interest rates are at an all-time low and it ties up money into a losing position.
The speaker predicts that due to increased interest rates, the real estate market will experience a drop in prices in the near future.
The United States is 30 trillion dollars in debt, and with interest rates going up, they'll have to pay more interest on it. This could lead to an era of austerity that will last beyond the current presidency.
The ratio of government debt to GDP has been a common way of analyzing debt. However, the duration of the debt is also important as increasing interest rates will cause debt service costs to soar.