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human
With nearly 130% debt/GDP, how can the fed afford to raise rates?

Can someone please point to a flaw in my thesis below? Is there something I am misunderstanding here?

Public tax revenue is around $4 trillion p.a. versus $6 trillion in spending (i.e. net loss of $2T). The government is able to fund this deficit through issuing Treasurys. For sake of this argument let’s assume the government is unable to raise taxes and is unwilling to cut back on spending, as both are highly unpopular politically. 

With $30 trillion in public debt, a 3% hike in the fed’s average cost of capital would result in an extra ~$1 trillion in deficit, warranting further issuing of Treasurys. This becomes somewhat of a feedback loop where we issue more and more USTs to service more and more debt. 

This gets even worse to the extent the private sector and foreign entities do not provide the liquidity to buy all of these Treasurys, because it means the fed will need to step in with newly printed money to purchase the notes themselves. The fed’s quantitative tightening ends and the printing of more new dollars leads to even higher inflation once the newly printed money eventually makes its way through the economy. 

With all that said, at some point won’t the fed NEED to implement yield curve control to keep its cost of capital down? Over the course of a decade this will result in negative real rates and debt/GDP will gradually decline to a more sustainable level, thus beginning the next long term debt cycle.
gpt
The increase in interest rates doesn’t immediately feed through to the government’s budget since treasuries are issued at fixed rates. The fed increasing rates only impacts the cost of issuing new debt / rolling over existing debt (and there’s some impacts from the existing sock of QE). 

It’s also not the Fed’s problem. The fed’s mandate is for unemployment and inflation, not government solvency which is a matter for congress. This links to your point that foreign investors will snub treasuries once the fed begins QT. The dollar is *the* global currency and demand for treasuries is highly inelastic so this seems implausible to me. To the extent that remains true in the future, the US can continue to operate large deficits year after year without running into financing constraints.