By Roger Runningen and Hans Nichols,Bloomberg
Obama has replaced hope with debt
President Barack Obama,calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.
“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho,New Mexico,outside Albuquerque. “We have to pay interest on that debt,and that means we are mortgaging our children’s future with more and more debt.”
Holders of U.S. debt will eventually “get tired” of buying it,causing interest rates on everything from auto loans to home mortgages to increase,Obama said. “It will have a dampening effect on our economy.”
Earlier this week,the Obama administration revised its own budget estimates and raised the projected deficit for this year to a record $1.84 trillion,up 5 percent from the February estimate.