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Let's take your 300 billion as accurate, that's still 9% of revenue being spent on just interest.
6.8% , not 9%
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Interest rates are close to 0%, they only have to go up from here.
Interest rates on that debt are about 2.2%
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What do you think will happen to payments on interest if interest rates double?
Hard to say, because that won't occur in a vacuum. The only realistic scenario where interest rates double is one of breakneck economic growth that also increases tax revenues.
Even in this scenario, we'd still have years of time before the average rate on public debt grew as high as the federal funds rate. This debt has its rates set for a defined maturity, it does not just grow overnight.
How do you calculate that? 275billion/3.3 trillion is 8.3%.
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Interest rates on that debt are about 2.2%
No, there is no one interest rate on the debt. The US debt is composed of multiple loans (bonds, notes, etc) at varying interest rates. However, all these interest rates track with the federal funds rate. A low fed interest rates means low interest rates across the board. As the rate increases, other interest rates will climb as well.
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Hard to say, because that won't occur in a vacuum. The only realistic scenario where interest rates double is one of breakneck economic growth that also increases tax revenues.
Why do you think the federal funds rate is close to 0%? Because the economy is weak, therefore the government is encouraging borrowing money. This is not a feasible long term solution as it will cause runaway inflation. Interest rates need to increase or our dollar will become worthless fairly quickly.
How do you calculate that? 275billion/3.3 trillion is 8.3%.
i'm calculating as a % of outlays, not as a % of revenues
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No, there is no one interest rate on the debt.
I didn't say there was. 2.2% is the current average.
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Why do you think the federal funds rate is close to 0%?
To encourage private sector borrowing.
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This is not a feasible long term solution as it will cause runaway inflation. Interest rates need to increase or our dollar will become worthless fairly quickly.
Indeed we were told that hyperinflation was going to occur in 2009. And 2010, and 2011, and 2012, et cetera. Yet inflation is at roughly 2% per year, right now.
One reasonable takeaway from the past 30 years is that inflation in the United States is driven primarily by the volume of private sector loans, not the volume or rate of public sector loans.
If one was interested in reducing inflation, curtailing bank lending would be the first and only step needed. Using inflation as a rationale for reducing public debt only makes sense in a country with no banking system, otherwise you're pssing into the wind.
Indeed we were told that hyperinflation was going to occur in 2009. And 2010, and 2011, and 2012, et cetera. Yet inflation is at roughly 2% per year, right now.
One reasonable takeaway from the past 30 years is that inflation in the United States is driven primarily by the volume of private sector loans, not the volume or rate of public sector loans.
If one was interested in reducing inflation, curtailing bank lending would be the first and only step needed. Using inflation as a rationale for reducing public debt only makes sense in a country with no banking system, otherwise you're pssing into the wind.
Some people argue that QE did not lead to high inflation, because:
(A) There existed deflationary forces when QE started.
and
(B) That banks and financial institutions getting money from QE hoarded the money to shore up their own severe problems and didn't lend out as much of it as they could. Therefore you didn't get a strong money-multiplier effect.
About a year ago, President Trump pledged to eliminate the national debt "over a period of eight years." But for the first time in history, the national debt surpassed $21 trillion this week, according to the U.S. Treasury.
The landmark comes shortly after Congress passed, and Mr. Trump signed, a suspension on the federal debt limit last month, allowing the government to borrow an unlimited amount of money until March 1, 2019.
When Mr. Trump took office on Jan. 20, 2017, the national debt was $19.9 trillion, according to U.S. Treasury data. Since then, the GOP-led Congress has passed a $1.5 trillion tax cut bill and a two-year spending deal which, together, are expected to drive the deficit and debt further upward. The Committee for a Responsible Federal Budget estimates annual deficits could top $2.1 trillion per year in the next decade, which would send the national debt soaring even higher.
News flash : National debt tops $1 trillion for the first time, National debt tops $2 trillion for the first time,
National debt tops $3 trillion - you get the idea. At least I hope you do.
News flash : National debt tops $1 trillion for the first time, National debt tops $2 trillion for the first time,
National debt tops $3 trillion - you get the idea. At least I hope you do.
Tell me the reason for increasing the debt this time around, was it supply side economics once again.
Keep in mind that Fitts was an assistant secretary of housing (HUD) under Bush Sr and Clinton, and founder of Hamilton Securities investment bank. When she began outing the government they attempted to kill her by running her car off a road.
Apparently, Ben Carson has discovered the same fraud is still going on.
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Originally Posted by Goodnight
Tell me the reason for increasing the debt this time around, was it supply side economics once again.
I think we saw that movie already.
It was because the DoD was allocated an additional several hundred billion, and accordingly the left wanted a matching increase in social spending. What would supply side economics have to do with this?
Why were you silent when Obama added $11T? What do you not understand about paying $300B a year in interest?
Selective outrage looks bad on anyone. Hypocritical outrage looks even worse.
Keep in mind that Fitts was an assistant secretary of housing (HUD) under Bush Sr and Clinton, and founder of Hamilton Securities investment bank. When she began outing the government they attempted to kill her by running her car off a road.
Apparently, Ben Carson has discovered the same fraud is still going on.
It was because the DoD was allocated an additional several hundred billion, and accordingly the left wanted a matching increase in social spending. What would supply side economics have to do with this?
Why were you silent when Obama added $11T? What do you not understand about paying $300B a year in interest?
Selective outrage looks bad on anyone. Hypocritical outrage looks even worse.
The deficit was solely because of the DOD increase, Obama was responsible for the prior deficits with a historic recession and a republican congress? I am opposed to deficits but haven’t heard reasonable solutions. Offering tax cuts when the economy is expanding is stupid.
Tell me the reason for increasing the debt this time around, was it supply side economics once again.
I think we saw that movie already.
I repeat !
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