Quote:
Originally Posted by chesapeake
Simply put, the US sells bonds to finance its debt. As long as the interest rate it has to offer to entice buyers to purchase those bonds remains ridiculously low, it can carry a large debt. When interest rates rise back up to more historical averages, it becomes a much bigger portion of the Federal budget. So, despite what others might tell you, size does matter.
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But that is for new debt, not existing debt. The interest rate on bonds is what it is set at when they are bought. (Note: there are a limited amount of Floating Rate Notes issued, but they are a very small amount, with a 2 year term)