They, meaning Treasury and the Fed, cannot afford any increase in the interest rate, as debt service would soon take up the majority of the budget if rates were to increase by two hundred basis points (2%).
But if the rates were to increase, Treasuries would become more attractive, right? They'd be able to just borrow more money to pay the increasing debt service.
I can see a problem with that once the rubes begin to understand that "the Full Faith & Credit of the Government of the United States of America" is not much different from "The Full Faith & Credit of the One-Eyed Homeless Guy in the Alley Behind Lefty's Bar," but folks who have been predicting for years that the rubes will open their eyes Any Day Now haven't been particularly successful so far.
