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Politics : The Trump Presidency -- Ignore unavailable to you. Want to Upgrade?

To: J_F_Shepard who wrote (45247)	11/15/2017 9:12:26 PM
From: i-node	Read Replies (1) \| Respond to of 364768

And when interest rates go up a couple points our debt is untenable and we get further credit downgrades. We are tapped out.

To: J_F_Shepard who wrote (45247)	11/16/2017 3:48:24 PM
From: Brumar89	Read Replies (1) \| Respond to of 364768

We can't pay off the debt we have now, we constantly roll it over. When a bond issue reaches maturity, it has to be rolled over ie replaced with a new issue of debt that is used to pay off the maturing bonds. If interest rates have gone up, your interest expense goes up and a lot more of your budget goes to paying interest. This is basically what happened with Greece, I believe, as well as with Trump's bankruptcies. Imagine a low interest mortgage with a balloon payment you're going to be refinancing when the balloon comes due. If market interest rates have gone up, the refinanced mortgage is going to cost you more interest every month. Imagine, you took advantage of the very low interest rates to buy a second and third home, all with balloon mortgages that you'll have to refinance. When you refinance those with higher interest rates, you're over-extended. That's why you shouldn't rack up the debt just for the hell of it because rates are low now. Just cause it costs you essentially zero now in interest, doesn't mean it will always be that way.