Yields on ten-year Treasury bills surged to 4.8 percent Tuesday, the highest in 16 years. The last time it was this high was in the immediate aftermath of the Great Financial Crisis.

The rising interest rates affect not only mortgages, car loans, and consumer credit card rates. They also are dramatically affecting how much of the federal budget is eaten up by payments on the nation’s $33 trillion debt. As the folks at the Committee for Responsible Federal Budget note, interest payments are now the fastest-growing part of the federal budget, and American taxpayers soon will be paying more to service that debt each year than they spend on national defense. By some estimates, around 60 percent of that $33 trillion was borrowed when the yield on ten-year T-bills was below three percent. Much of that debt is now being rolled over at considerably higher rates.   

Policymakers have known for years now that this fiscal cliff was coming, but they ignored it, preferring to continue the profligate spending that began during the Trump administration when interest rates were much lower. The era of “free money” is over, but rather than trying to rein in the spending, the Biden administration has embarked on an unprecedented spending binge and is on course to add $7 trillion to that debt by the time his first term is complete.

White House claims that President Biden is reducing the deficit and putting the nation’s fiscal house in order are, to put it mildly, specious. The president’s handlers would have Americans ignore that the baseline for its budget estimates was the 2020 federal budget — a year of astronomical spending. America spent nearly 50 percent more in fiscal 2020 than it did in fiscal 2019 in order to stave off the effects of the Covid pandemic. Mr. Biden has normalized that emergency spending and has increased the budget by 40 percent more than 2019 levels.

The only players apparently trying to back away from the fiscal cliff — the House’s GOP caucus — are getting the worst press at the moment. Mr. Biden bragged that he fended off the “extreme MAGA Republicans” during last weekend’s spending showdown. “We stopped them,” he said, but “they’ll be back again.” Americans should hope they do.

Casualties of the Chaos

A new poll from Gallup Tuesday suggests that the drama in Congress is taking its toll on Americans’ views of the country’s two main political parties. About 56 percent of voters view the Republican party unfavorably, and 58 percent of them view the Democratic Party unfavorably.

That said, voters say they trust the GOP more than the Democrats as shepherds of the country’s economy by the widest margin since 1991. Fifty-three percent of those surveyed said they trust the GOP more on economic issues, versus 39 percent who said they trust the Democrats. Voters also trust the GOP more to keep the nation safe from terror and military threats.

Mr. Biden fares even worse than the parties. Six out of ten voters disapprove of the job he is doing, and three-quarters say they are pessimistic about the economy going forward.

Economics 101

The U.K.’s Chancellor of the Exchequer, Jeremy Hunt, admitted Tuesday what many in the Biden administration have failed to acknowledge — the massive money printing during and after Covid is one of the main reasons for the sky-high inflation that followed. “Quantitative easing,” he said during an event on the sidelines of the annual Conservative Party conference. “I think it is reasonable to say we collectively underestimated the impact of that.” The annual inflation rate in Great Britain was 6.7 percent.

Also Noteworthy:

• California will soon allow residents of Mexico to pay in-state tuition at community colleges in the state.
• The RNC is muzzling some of the current GOP presidential hopefuls.
• The IRS is redefining who America’s “rich” people are as it ramps up plans for more enforcement.
• Wisconsin court rules that a school cannot “affirm” a student’s gender identity against the parents’ wishes.
• At least 148 migrants have died trying to cross the Rio Grande near El Paso this year, the highest number ever.
• The Federal Reserve has joined instagram and is posting videos of Chairman Powell.
• If it fetches the asking price of $218 million, this would be the most expensive home ever sold in Florida.
• A surprising number of French citizens would approve of limiting people to four flights in the course of their lifetime to fight climate change.Democrats are worried that there will be too many white people at their convention next year.