[quote=sreeb]
1) If interest rate only go up by a factor of 4 (not unrealistic given how low they are now), we are completely screwed.
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Well, maybe not exactly. It would be detrimental, but US Govt bonds aren’t callable. I believe average maturity on outstanding government debt is about 5 years. (I have no idea how the inter-governmental debt figures into that average, like the special issue bonds for SS OAB.) So if rates go up by a factor of 4, interest paid will not suddently get quadrupled. The interest on long-term debt won’t change at all. It will increase expenditures for new bonds, but not by a factor of 4. Some of those bonds coming due were issued 10 years ago and more when rates were significantly higher than they are today.