Is National Debt an Invisible Tax on Us?

Letter to Ephesians: Inflation’s an SOB. But, the Swamp may be worse in making our cost-of-living insufferable as it drives the national debt over $36T. It’s now OUR problem because the DC spendthrifts are competing with us for loans, thereby driving up everyone’s cost for every kind of loan.

So argues Jack Salmon in a Fox News op ed. He says, “Economists have a term for what’s happening: ‘Crowding out.’ When the government borrows more, it competes with private borrowers for capital. And when two consumers want the same thing, the price usually goes up – in this case the price of borrowing” aka “interest rates.” Look at your monthly bills that seem to keep spiraling upwards. Think the mortgage, car loan, student loan, credit card debt. Salmon says, “Mortgage rates [at 6.8%] are now hovering near their highest levels in over 20 years. That’s not [just] because lumber or labor costs spiked, but because of the effects of federal borrowing.” Then, again, the average cost of credit card debt, we’re told, is now pushing 20%, “driven in part by the same upward pressure caused by the growing federal debt.”

Surely, President Trump & his economic advisors are aware of this "invisible tax" on all of us and how Biden's "Green New Deal" & Covid spending turbo charged it by sending the already dangerous debt into orbit. It's why he is trying to get the FED to lower its own interest rate. But the reality is even an unlikely full point drop tomorrow would provide little relief under Salmon’s view, especially since Trump's own "Big Beautiful Bill" would likely increase the national debt over time. Meanwhile, the interest paid by the USA on its debt keeps taking up an ever-larger portion of its annual budget forcing it (and many of us) to borrow still more at still higher rates to meet still more expensive daily needs. It's why every credible economist (& most recently Elon Musk) calls the seemingly inevitable expanding debt "unsustainable."

Davd Soul