Debt Limit Press Conference


Listened to the last part of Obama's debt limit speech. Struck by this line I keep hearing about how the lack of the debt deal will spike interest rates and cause a defacto "tax" on the American people. This strikes me as a disingenuous claim. Interest rates going up is not a tax. It makes the cost of borrowing money higher. It incentivizes saving vs. spending and creates opportunity to make more money for lenders and savers. This is not the same as the government taking more money from people and either spending it or paying down debt. A very dubious thing to say. Might even call it an outright lie.