Financial analysts are forecasting higher interest rates as a result of the budget bill.
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The tax cuts bill and increase in government spending come as the economy is expanding, which some also criticize.
“Deficit-financed tax cuts and now government spending increases in a full-employment economy is poor economic policy,” said Mark Zandi, chief economist with Moody’s Analytics.
He predicted soaring interest rates.
“The Federal Reserve will have little choice but to raise short-term rates more aggressively, and the Fed tightening combined with the increased government borrowing will drive up long-term rates more quickly,” he added. “Lawmakers are doing the opposite of what economic textbooks suggest they should be doing.”
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Higher interest rates mean the government will be paying more to borrow to finance the deficit, which will mean even more debt.
http://thehill.com/policy/finance/37...ads-on-deficit
