A one-percentage-point rise in interest rates – which is likely to happen this year – would boost the amount of money paid on interest on the federal government debt to $530 billion.

And a two-percentage-point increase – entirely possible by 2023, under current projections – would raise it to $750 billion. That's about as much as all government spending on defense. And it's completely unsustainable.

Three percentage points higher, and the government would be spending nearly $1 trillion on interest expense alone... which is around 20% of total federal tax revenue and is approximately as much as what's spent on Social Security benefits every year.

At this point, no one is talking about interest rates at the 3% level. But it's hardly otherworldly: As recently as 2008, interest rates were at 4%.

If you're doing the math, it's clear... The numbers don't add up.

The Federal Reserve could, in theory, print as many dollars as the government needs to make its interest payments. But Uncle Sam having to bail itself out will likely lead right back to – you guessed it – more inflation.

Or, the government could put in place a cataclysmic tax hike... also known as "political suicide," which seems unlikely.

Another alternative is to cut spending. But there's not a lot of wiggle room... If we subtract "mandatory spending" and defense spending, there's only 20% of the budget left. That 20% left to pay for, well, everything else.

https://www.zerohedge.com/news/2022-01-21/fed-lying-interest-rates-cant-go-much-higher

To understand the catastrophic situation more textured, there are now 45 trillion non-financial sector market debt in bonds in the United States (24.3 trillion treasuries, 4 trillion municipal bonds, 6.7 trillion corporations, 10.5 trillion agency papers) and 28.3 trillion in loans (6.4 trillion corporate loans, 4.4 trillion consumer loans and the rest are mortgages, of which 12.3 trillion for the population). A total of 73.3 trillion of debt in bonds and loans for the non-financial sector, approximately 15% of which is refinanced annually, including for scheduled repayments of obligations, i.e. about 11 trillion a year is refinanced. A 1% rate hike costs more than $110 billion in additional service costs. This does not take into account the new debt, which under normal conditions grows by 3-3.5 trillion a year, therefore already under 150 billion and only for one percentage point.

The problem is that you can't get off with one percentage point.

It is huge issues.

Issues with 1y bills

Moments ago, the NY Fed announced that "due to technical difficulties, today’s Treasury outright purchase operation - scheduled for 10:10 AM - will be rescheduled. It is now scheduled to take place Friday, February 25, 2022 at 10:10 AM. Additionally, today’s MBS outright purchase operations – scheduled for 10:00 AM and 11:30 AM - will also be rescheduled to Friday, February 25th, 2022 and Monday, February 28th, 2022 respectively. Information on Treasury securities operations and MBS purchase operations can be found on the New York Fed’s webpage. This does not impact any other operations scheduled for today."