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Interest payments as a percentage of GDP are actually much lower now than they've been in the past: http://research.stlouisfed.org/fred2/series/FYOIGDA188S htt

• JetSpiegel 12y ago
  Interest doesn't get come out of the GDP, only the Government pays it.
  • dllthomas 12y ago
    The government pays it, ultimately, out of tax revenues derived from GDP.
• jeffdavis 12y ago
  That doesn't dispute my point at all. I'm not worried about the payments now. I'm worried about the payments if interest rates go up. And we shouldn't be surprised if rates go up substantially, because they are at historic lows right now.
  • muzz 12y ago
    There is a reason why they are at historic lows-- it is the decision of market participants. Your concern is essentially that market participants will somehow do a complete 180, for no stated reason.
    • jeffdavis 12y ago
      "Your concern is essentially that market participants will somehow do a complete 180, for no stated reason." If market participants demand a higher interest rate, I wouldn't call that a "complete 180". Regardless, change is the only constant, as they say. Markets move. Behavior changes in response to the environment. If we really are supposed to be a risk-free place to loan money, then I would think we'd be a little more resilient to rising interest rates, which happen fairly often historically.
    • skylan_q 12y ago
      If you count the federal reserve as a market participant.