“People are starting to come to the conclusion that you’ve got a self-sustaining recovery going on here,” said Thomas Girard who helps manage $133 billion in fixed income at New York Life Investment Management in New York. “When interest rates start to go back up because of the normal business cycle, debt service costs have the potential to just skyrocket. Every day that we don’t address this in a meaningful way it gets more and more dangerous.”
Now that the economy is beginning to right itself, as it likely would have with or without government intervention, the fact that the government did intervene significantly - and did not curtail spending generally or conclude the conflicts in Iraq or Afghanistan definitively - could have some unfortunate consequences.
The problem of dealing with the government's accumulated debt, already an obvious problem, could become an acute crisis in and of itself:
Debt-service costs will climb to 82 percent of the $757 billion shortfall projected for 2016 from about 12 percent in last year’s deficit, according to the budget projections.
The ball and chain we're dragging along may get heavier and heavier.