Obama budget plan shows interest owed on national debt quadrupling in next decade
By Steven Mufson
Washington Post Staff Writer
Thursday, February 17, 2011
Interest payments on the national debt will quadruple in the next decade and every man, woman and child in the United States will be paying more than $2,500 a year to cover for the nation's past profligacy, according to figures in President Obama's new budget plan.
Starting in 2014, net interest payments will surpass the amount spent on education, transportation, energy and all other discretionary programs outside defense. In 2018, they will outstrip Medicare spending. Only the amounts spent on defense and Social Security would remain bigger under the president's plan.
The soaring bill for interest payments is one of the biggest obstacles to balancing the federal budget, pushing the White House and Congress to come up with cuts deeper than previously imagined. Unlike with discretionary spending or even entitlement programs, the line item for interest payments cannot be altered except through other budget cuts.
The phenomenon is a bit like running up the down escalator. Without interest payments, the president's plan would balance the budget by 2017. But net interest payments that year are expected to reach $627 billion, up from $207 billion in the current fiscal year.
(More here.)
Washington Post Staff Writer
Thursday, February 17, 2011
Interest payments on the national debt will quadruple in the next decade and every man, woman and child in the United States will be paying more than $2,500 a year to cover for the nation's past profligacy, according to figures in President Obama's new budget plan.
Starting in 2014, net interest payments will surpass the amount spent on education, transportation, energy and all other discretionary programs outside defense. In 2018, they will outstrip Medicare spending. Only the amounts spent on defense and Social Security would remain bigger under the president's plan.
The soaring bill for interest payments is one of the biggest obstacles to balancing the federal budget, pushing the White House and Congress to come up with cuts deeper than previously imagined. Unlike with discretionary spending or even entitlement programs, the line item for interest payments cannot be altered except through other budget cuts.
The phenomenon is a bit like running up the down escalator. Without interest payments, the president's plan would balance the budget by 2017. But net interest payments that year are expected to reach $627 billion, up from $207 billion in the current fiscal year.
(More here.)
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1 Comments:
When the interest on our debt reaches 18% of our budget, look for bond ratings agencies to downgrade our paper.
Can you imagine that? The safest investment in the history of the world - a US Treasury bill, bond or note - could approach junk status.
Is there any doubt, any doubt at all, that Democrats have no idea how to manage budgets? When Nancy Pelosi and Harry Reid added $5 trillion to the debt in four short years, didn't it ever dawn on them that there might be serious negative consequences - more serious than if they had just let the economy hit bottom, shed the malinvestment and allow it to recover?
Democrats don't run businesses. They go to law school or become teachers or work in government their entire lives - or just live on their trust fund like Mark Dayton does eschewing government salary so he doesn't have to pay income taxes (until he became governor). Democrats go to the Ivy League where they are insulated from the vicissitudes of life and map out wondrous central planning economic philosophies on the classroom chalkboards with the other government-as-the-be-all-end-all types who also never worked a real job a day in their lives never realizing that the glorious philosophies that work so well in the classroom just don't see to translate to the real world, no matter how well intentioned their efforts are.
I for one hope we go bankrupt. It will be far less painful to default on our government debt than to keep the ruse going.
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