All the talk lately about the size of the national debt is obscuring the real problem: The U.S. government made the wrong bet on interest rates and that will cost taxpayers for years to come.
The government took on an unprecedented amount of debt in the last five years. Reasonable people can disagree about the level of spending, but the clear policy error was choosing to finance that spending with short-term debt while rates were at record lows. Now that rates are rising, so are the costs of financing all this debt.
It didn't have to be this way. We could have locked in rates when they were low. But at the time there was a pervasive belief that rates would never increase — even though, eventually, they always do. Now, as we face high debt service costs for decades, we can't afford to ever forget this lesson.