I have to admit that I haven't been looking inside the US of late because of the large number of black swans outside the US.
So Feldstein is basically saying that a rise in US interest rates (as evidenced by Treasury yields) will trample US household wealth …… as it will our local asset bubbles and presumably for exactly the same reasons.
Trump is a BIG spender and the combination of significant expenditure increases combined with significant tax cuts can only mean significant debt increases which requires a higher interest rate.
Should Trump be booted out the world will find out that Pence is a fiscal hawk. He is the man that enacted cuts to bring Indiana's crazy budget overspends back into line. There are of course limits to how much spending can be reduced by the aptly named Pence. I haven't thought the Pence scenario through fully BUT the US is only one part of the global economy and there are plenty of sovereign default risks which are all linked together through a now fragile banking system.
Maybe a hawkish Pence would delay the inevitable but not prevent it.
