Opinion | Why We Should, but Won’t, Reduce the Budget Deficit - The New York Times

Amid terrible events abroad and the takeover of the Republican Party by agents of chaos, the U.S. economy has been delivering lots of good news. All indications are that real G.D.P. is still growing fast; we’re adding jobs at an extraordinary pace, even as inflation continues to fall. There is, however, one piece of the economic picture that’s worrisome: Long-term interest rates have gone up a lot since early 2022, especially over the past six months. (I’ll talk about the break-even rate in a minute.) This spike in long-term rates is problematic in a couple of ways. It’s not a crisis, at least not yet. But in a better world we’d be taking action to bring interest rates down in a sustainable way. In particular, now would be a good time to rein in budget deficits. However, the chances of serious action on the deficit anytime soon are near zero. And it’s important to understand why. First, why are high interest rates a problem? So far, there’s no indication that they’re about to cause a r

Amid terrible events abroad and the takeover of the Republican Party by agents of chaos, the U.S. economy has been delivering lots of good news. All indications are that real G.D.P. is still growing fast; we’re adding jobs at an extraordinary pace, even as inflation continues to fall. There is, however, one piece of the economic picture that’s worrisome: Long-term interest rates have gone up a lot since early 2022, especially over the past six months. (I’ll talk about the break-even rate in a minute.) This spike in long-term rates is problematic in a couple of ways. It’s not a crisis, at least