Today, U.S. Rep. Randy Feenstra (R-Hull) sounded the alarm on the dangerous trifecta of soaring inflation, rising interest rates, and a growing national debt that threatens the American economy and family budgets nationwide.
In his remarks before the House Budget Committee hearing, Feenstra explained that inflation has prompted the Federal Reserve to raise interest rates to achieve price stability and combat soaring costs for everyday goods like gas and groceries. However, these interest rate hikes reverberate throughout the entire economy, causing interest payments on car and home loans to increase and family budgets to shrink. Ultimately, higher interest rates also lead to increased payments on the nation’s $30 trillion debt, creating a vicious debt spiral that pours taxpayer dollars into interest payments instead of paying down the principal.
“In Iowa, families are sitting around the kitchen table trying to figure out how they are going to make ends meet because of skyrocketing inflation. Gas and grocery prices are at record highs while paychecks are shrinking in real terms” said Rep. Feenstra. “Now, the Federal Reserve’s efforts to combat inflation by increasing interest rates are having a direct effect on the family budget. Payments on car, home, and other loans will increase due to Democrats’ wasteful spending, which is fueling inflation, draining savings, and making life harder for working families. This alarming trend will also funnel billions of taxpayer dollars towards interest payments on our growing $30 trillion debt.”
Former U.S. House Speaker Newt Gingrich commended Feenstra for bringing attention to the threat that rising interest rates pose to family budgets and the nation’s $30 trillion debt, calling it a “hidden threat” that is not being discussed enough in Congress:
“As the largest debt holder in the world, very high interest rates on the federal debt will eat up the [federal] budget. This is part of why were so adamant in the 90s about balancing the federal budget, which we did for four straight years, with President Bill Clinton on a bipartisan basis. We had a program. We cut regulations, [we cut] taxes; all the supply-side economics that President Reagan implemented in the 80s turned out to work,” said Gingrich. “Inflation came down, interest rates came down, jobs grew, and children came out of poverty because their parents came out of poverty.”
Gingrich continued, “If we get a significant increase in the interest rate from the Federal Reserve, the effect of that on the federal budget will be staggering, and it may well mean that the debt payment will be equal to the defense budget.”
You can watch Rep. Feenstra’s and former House Speaker Newt Gingrich’s remarks HERE.