I predicted this would happen, which is like predicting the vase will fall off the shelf after the cat pushes it. So — surprise! — the bond markets aren’t happy with our new Democratic overlords. The New York Times (!) reports:
As the Obama administration racks up an unprecedented spending bill for bank bailouts, Detroit rescues, health care overhauls and stimulus plans, the bond market is starting to push up the cost of trillions of dollars in borrowing for the government.
Last week, the yield on 10-year Treasury notes rose to its highest level since November, briefly touching 3.17 percent, a sign that investors are demanding larger returns on the masses of United States debt being issued to finance an economic recovery.
While that is still low by historical standards — it averaged about 5.7 percent in the late 1990s, as deficits turned to surpluses under President Bill Clinton — investors are starting to wonder whether the United States is headed for a new era of rising market interest rates as the government borrows, borrows and borrows some more.
Yes, we’re in the middle of a credit crisis, and President Obama’s policies are crowding out private borrowers — and, further out, making it more expensive for you to take out a mortgage or a car loan.
For someone who claims to be the smartest guy in most any room, you’d think Obama would at least have more sense than the morons in Congress.