I didn't watch the video but it would be worth watching.
Carney stated that the total amount of debt isn’t the issue, it’s the interest rate on it that creates pressure and causes long-term issues. He added that even if tax cuts decrease revenue, they won’t cause interest rates to increase and that’s what we’ve seen over the past forty years where, even as the debt and deficit increased, interest rates didn’t until they were recently increased to deal with inflation.
I think he is correct. This doesn't seem to make logical sense, but primary deficits don't matter, whether they are caused by tax cuts or by increasing spending. What matters is the interest paid, which is correlated to interest rates. And the Fed has proven that they have total control over interest rates, at least in the short run. The Fed could cut rates if they want to, but they don't want to because their constituents, the uber-wealthy, like the free money, and also the Fed doesn't like the current president so they are trying to stick it to him. They will cut rates only if forced to do so. Which in turn incentivizes the president to say and do crazy stuff, even to intentionally cause a recession, to force the Fed to cooperate.
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