>> Washington is in the midst of a borrowing binge of historic proportions. The US Treasury, on Thursday, wrapping up the final leg of this week's whopping $258 billion sale of new government dept. Reuters reporter, Kate Duguid.>> This is the second largest ever issuance of dept over the course of a three day period by the US government.
And the reason that they need to raise so much money is because President Donald Trump's tax bill is expected to add 1.5 trillion dollars to the US deficit. And the budget deal that was recently passed by Congress is expected to add about 300 billion. So the American government needs to raise some money.
>> But that money isn't as cheap as it used to be. Demand in the latest debt auction was so lackluster, the government had to pay the highest interest rates in seven years to complete the sale. Investors are demanding a higher payback, betting a growing economy, all but ensures the Federal Reserve will keep on raising interest rates.
>> Spending like this usually happens during recessions. This is sort of not normal spending for good economic times. People aren't sure exactly what will happen with the debt going so high. It may though start prompting economic problems if the deficit grows large enough. Typically, the government spends more during a recession.
In this case, it may be that the government causes a recession with its spending.>> And fear is growing that if that happens and the economy slides into recession, Washington won't have any tools left to get the economy going again.