As a share of the deficit, interest would rise from 19.2 percent this year to 62 percent in 2020.
"If we risked spending a lot more money or giving up on our plan to get on top of our debts and our deficit, interest rates could go up, mortgage rates could go up.
In March, Keating reported to cabinet that he could not "stress enough" the need for "a budget outcome which will help take pressure off the current account deficit, interest rates and the exchange rate".
And from 2001 to 2003, while we went from surplus to deficit, interest rates plunged to levels not seen since the 1950s.
To join the single currency bloc, countries need to qualify in four areas: price stability, public finance discipline as measured by public debt and any budget deficit, interest rates and exchange rate stability.
To keep the decrease in interest income from affecting the government's annual budget deficit, interest rates on federal loans for graduate students rose.
This might do wonders for the deficit (interested, George?) but, I would argue, won't solve the problem (we didn't save the ozone layer by taxing CFCs).
I am, by the way, grateful to those commenters — thinking about the equivalence of the China-debt and deficit-interest fallacies nudged me into a better, simpler formulation of my NK model, which I'll say more about in a few days.
But this argument rests on how government deficits affect interest rates, and the relationship between government deficits and interest rates varies.
First, it has to stop running a so-called primary deficit, or the deficit before interest payments.
