Threethirty
You say interest rates need to rise. This argument is often made, however when the US owes US$16,400,000,000,000 can they afford for interest rates to rise?
Long term US interest rates sit just below 2%, which results in an annual interest bill of about $300bn. To put this into context, this is about a third of the US Defence Budget and dwarfs the recent tax rises which will generate about $60bn. Consider an interest rate rise to, say 5%, and 4 more years of Obama annual deficits of $1,300bn. The US would owe $21,600bn and at 5% that results in an annual interest bill of $1080bn. Again, to put that in context, the annual interest bill would be greater than the Defence Budget and, assuming Total Revenues of $3000bn (currently $2,500bn), for every $3 of revenue, $1 is spent on interest.
Even if interest rates stay at 2%, the picture is not pretty. The market knows the US has the assets to back this debt and, when compared to the rest of the world, the US remains a good debtor. However, the US is on a fiscal trajectory to running out of cash (not assets). The Obama administration know that in 4 years, this is some else's problem.
It's call inter-generational theft!!