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There is something off with the charts on the site you refer to (they don't provide the actual numbers in the charts). Simple calculation: With $20T of debt,
by jazzyk 10y ago
There is something off with the charts on the site you refer to (they don't provide the actual numbers in the charts).
Simple calculation:
With $20T of debt, at 3% interest rate (30Y bond), the interest on the debt is adding 600 billion dollars to the deficit per year (and it compounds).
600 billion with respect to the 3.8 billion federal budget is almost 16%.
And the interest rate is so low only because debt rates have been artificially suppressed by central banks using financial tricks such QE, the Fed buying its own's governments' debt, etc.
With interest rates bound to rise sooner or later, we are sitting on a financial time bomb.
- maxerickson 10y agoThe US pays (on average) less than 3%. The debt is also just a bit less than $19 trillion. So we save $30 billion by using the slightly smaller debt and $120 billion by using the interest rate of 2.4%. $450 billion is still a huge budget item and it is a problem that interest rates will rise.