That’s right, good old uncle sam just got their long term outlook downgraded to negative, but you can rest knowing that the government can still borrow money. Imagine if you or I got a credit revision to “negative” do you think you’d be able to borrow money at 3.50 percent which is what the yield on 10 year bonds is right now. Hell we wouldn’t even be able to get a loan at 20 percent. As a result CD rates monitorbankrates.com/cdrates at banks and credit unions will stay low for awhile along with refinance rates monitorbankrates.com/mortgages mortgage rates and other loans.

This is all a good thing though since both you and I along with every other citizen and U.S. citizens that haven’t even been born yet probably for generations to come. Why? Because part of the taxes we pay goes towards paying interest on government debt. Unfortunately, more and more goes towards paying interest so you can well expect higher tax rates in the future.

Higher tax rates and higher interest rates because even though 10 year bond yields are at 3.50 percent yields will be going higher in the future. The government sells bonds to raise money, the higher interest they pay the higher interest other countries, companies and we pay.