Almost exactly one year ago, I argued on these pages that the CBO’s rate assumptions were far out. I pointed out that the CBO was assuming that the effective rate on outstanding federal debt would converge to 3.6 percent in a decade, which was then at the very upper end of the long-term range of the FOMC members. How far have we come in a single year. Now I am going to tell you that the CBO is being way too sanguine about its rate assumptions. And that this poses an existential risk to the ...
