From James Howard Kunstler:

Total US debt has doubled under President Obama from around ten trillion to twenty trillion dollars (as it doubled under Bush Two from five to ten trillion dollars). The reason, as stated above, is that we don’t produce enough to cover the cost of our national way of life, so we have to borrow continually at ever-greater volume. Every year, the Treasury has to pay interest on all that debt. It’s a lot of money. This year, with interest rates starting out at historically unprecedented lows (not seen ever in recorded history), the Treasury paid over a quarter-trillion dollars in interest. By the way, the government borrows money to make these interest payments too. An interest rate rise of one percent, would drive the annual US debt higher by $190 billion. As the late, great Senator Everett Dirkson (R-Ill) once pungently remarked: “…a billion here, a billion there, sooner or later you’re talking about real money.”

A sharply rising interest rate on the ten-year Treasury bond will thunder through the system. A lot of other basic interest costs are keyed to the ten-year bond rate, especially home mortgages, apartment rentals (landlords hold mortgages), and car payments. When the ten year bond rate goes up, so do mortgage payments. When mortgage rates go up, house prices go down, because fewer people are in a position to buy a house at higher mortgage rates, and rents go up (more competition among people who can’t buy a house). Zero Interest Rate Policy (ZIRP), in force for ten years, has driven house prices back to stratospheric levels. They are now primed to fall, perhaps severely, leaving many homeowners “underwater,” with houses worth way less on the market than the amount of mortgage left to pay off. The re-financing market is dead. Housing starts were already down by a stunning 19 percent in November. Automobile sales are rolling over. Manufacturing and retail sales numbers are down at year end. What’s up: stocks, stocks, stocks.

JHK is seldom right on his timing, but 2017 might be a watershed.