That’s correct. I was trying to make the point that if the debt is rolled over, it has to be rolled over at the new interest rate and that leads to a geometrically compounding death spiral.
For instance, if we have $1T of debt that was financed for five years at 2.5% then the interest payment was $25B per year which also has to be financed. If we try to roll that over but interest rates went up (as they must if we print more money, if our bond rating goes down or if investment money becomes scarce) to 7.5% then that interest payment goes up to $75B per year. That difference adds to even more financing being required. At some point (economic historians use 120% Debt to GDP ratio as a rule of thumb) one can’t print money fast enough to refinance the old debt. The debt rises faster than simple compounding because the interest rate is no longer constant but starts compounding too.
Did I do a good job of explaining what I meant this time?
Very clear and exactly how I understand the situation. It’s been a while since I joined into an economic discussion was probably what caused the disconnect.