Funny how age changes perspective. I used to think deficits didn't matter much. Now I'm genuinely worried about government spending.
But here's the thing: it's not because I got old and cranky. The macro backdrop shifted completely.
When rates were zero and inflation was dead, printing money had fewer consequences. Now? Higher rates mean debt service costs explode. Inflation's sticky. The math just looks different.
This isn't a political take. It's arithmetic. When borrowing costs rise and you're running massive deficits, the interest expense alone becomes a problem. That's real money that can't go anywhere else.
Markets care about this stuff eventually. Currency stability, bond yields, inflation expectations — they all connect back to fiscal discipline or the lack of it.
I'm not saying cut everything tomorrow. But pretending the old playbook still works in a higher-rate world is dangerous. Conditions changed. The rules changed. Ignoring that is how you get nasty surprises.
But here's the thing: it's not because I got old and cranky. The macro backdrop shifted completely.
When rates were zero and inflation was dead, printing money had fewer consequences. Now? Higher rates mean debt service costs explode. Inflation's sticky. The math just looks different.
This isn't a political take. It's arithmetic. When borrowing costs rise and you're running massive deficits, the interest expense alone becomes a problem. That's real money that can't go anywhere else.
Markets care about this stuff eventually. Currency stability, bond yields, inflation expectations — they all connect back to fiscal discipline or the lack of it.
I'm not saying cut everything tomorrow. But pretending the old playbook still works in a higher-rate world is dangerous. Conditions changed. The rules changed. Ignoring that is how you get nasty surprises.