On a sixteen-terabuck national debt, once a 2% rise works its way into the rolled-over short-term bonds that make up the bulk of the debt, that’s another $320 billion per year that the Benbernank will have to print.
And print it they will. I’ve always maintained that the only rational endgame for the politicians involves massive inflation and repayment of our debt in Monopoly money. There won’t be any Volcker to jack up interest rates either; they intend to keep rates low and let inflation do what it will. There are always more debtors than savers, and so that is who the politicians are forced to pander to.