US debt payments will soon exceed military spending

[bostonangler]

The U.S.’ debt is skyrocketing – and soon the country will spend more on servicing its debt than it will on national defense – and a little further out it will spend more on debt than on all nondefense discretionary programs combined.

While America’s debt has skyrocketed, low inflation and international demand for Treasury bonds has held down interest costs, but with the Federal Reserve hiking interest rates, this is expected to change.

As reported by The Wall Street Journal citing data from the Congressional Budget Office (CBO), the U.S. will spend more on interest than it spends on Medicaid in 2020, in 2023 interest spending will exceed national defense spending, and by 2025 it will spend more on interest than on all nondefense discretionary programs combined.

The CBO estimates that interest spending will rise to $915 billion by 2028, equivalent to 3.1 percent of gross domestic product, and well above the interest costs of $263 billion, or 1.4 percent of gross domestic product in 2017, as calculated by the Wall Street Journal.

While debt has been increasing, low inflation and a strong demand for U.S. Treasury bonds have held down interest costs. But now, the Fed is hiking interest rates as inflation has percolated higher. Higher interest rates will translate into higher debt payments.

But, it isn’t just higher rates that are a concern – it is the total amount of debt. The country’s total debt is currently around $21 trillion, including $15.8 trillion in public debt. According to Statista, by 2028 total debt will swell to $33.8 trillion

https://finance.yahoo.com/news/us-debt-payments-soon-exceed-160557722.html

 

 

Hey I know hand out some more corporate welfare and increase spending, now that's fiscal conservatism!

B/A

Edited November 13, 2018 by bostonangler

[Muleslayer]

8 hours ago, bostonangler said:

The U.S.’ debt is skyrocketing 

Thank you Obama!

[bostonangler]

7 hours ago, Muleslayer said:

Thank you Obama!

 

No you should thank "W" first for putting us in two wars and deregulating the banks... Then thank Obama for creating debt trying to save America from itself. But of course if you have any knowledge of finance, you would understand Trump's tax cut and increase in spending supported by a republican house and senate can only make debt go up. But because you are such a financial expert, explain how reducing revenue and increasing spending will reduce the debt. We need someone to make sense of the new fiscal policies, maybe you can help out.

Trump supporters have bought into the idea that corporate welfare and increased spending works to reduce debt, so I'll wait for you to explain how that works... Thanks

 

B/A

[Shabibilicious]

33 minutes ago, bostonangler said:

 

No you should thank "W" first for putting us in two wars and deregulating the banks... Then thank Obama for creating debt trying to save America from itself. But of course if you have any knowledge of finance, you would understand Trump's tax cut and increase in spending supported by a republican house and senate can only make debt go up. But because you are such a financial expert, explain how reducing revenue and increasing spending will reduce the debt. We need someone to make sense of the new fiscal policies, maybe you can help out.

Trump supporters have bought into the idea that corporate welfare and increased spending works to reduce debt, so I'll wait for you to explain how that works... Thanks

 

B/A

 

You know that old saying, B/A......"You gotta spend money to make money"...(spit)  

 

GO RV, then BV

[bostonangler]

2 minutes ago, Shabibilicious said:

 

You know that old saying, B/A......"You gotta spend money to make money"...(spit)  

 

GO RV, then BV

 

And if that doesn't work there's always bankruptcy... LOL

B/A

[Shabibilicious]

24 minutes ago, bostonangler said:

 

And if that doesn't work there's always bankruptcy... LOL

B/A

 

Multiples, in fact.  

 

GO RV, then BV

[Muleslayer]

14 hours ago, bostonangler said:

But of course if you have any knowledge of finance

 

14 hours ago, bostonangler said:

But because you are such a financial expert,

opposing statements. you are very conflicted dear.

[bostonangler]

8 hours ago, Muleslayer said:

 

opposing statements. you are very conflicted dear.

 

So I noticed you didn't explain how cutting income and increasing spending is going to decrease the debt... Nice deflection just like the president. Did you hear his latest... Now we have people changing costumes so they can vote twice. Surely his followers don't believe this one... LOL

 

B/A

[Shabibilicious]

1 hour ago, bostonangler said:

 

So I noticed you didn't explain how cutting income and increasing spending is going to decrease the debt... Nice deflection just like the president. Did you hear his latest... Now we have people changing costumes so they can vote twice. Surely his followers don't believe this one... LOL

 

B/A

 

Delusional Donald also claims I.D. is required to buy cereal.  

 

https://www.washingtonpost.com/politics/2018/11/14/trump-claims-an-id-is-needed-buy-cereal-that-fraudulent-voters-simply-switch-hats/?noredirect=on&utm_term=.6b1b534f3558

 

 

GO RV, then BV

[coorslite21]

So back to the theme of the thread.......

 

The interest issue is kind of a double edged sword..........Interest rates need to go up.......and are going up................as they do, this increases the payment to the debt, creating more debt.......

 

Unsustainable........and really unfixable........

 

In 2008 we had a near total melt down to the world economy.........it was averted by throwing worthless paper at the problem....

 

It worked...........

 

So what might the magic bullet be this time...........try......

 

The Golden Inflation Cure

 

The Fed could actually fix this in 15 minutes......

 

 

The Fed can call a board meeting, vote on a new policy, walk outside and announce to the world that effective immediately, the price of gold is $5,000 per ounce.

 

They could make that new price stick by using the Treasury's gold in Fort Knox and the major U.S. bank gold dealers to conduct "open market operations" in gold.

 

They will be a buyer if the price hits $4,950 per ounce or less and a seller if the price hits $5,050 per ounce or higher. They will print money when they buy and reduce the money supply when they sell via the banks.

 

The Fed would target the gold price rather than interest rates........(and of course increased interest rates make the overall debt and debt payments increase.....CL)

 

The point is to cause a generalized increase in the price level. A rise in the price of gold from today's roughly $1,230 per ounce to $5,000 per ounce is a massive devaluation of the dollar when measured in the quantity of gold that one dollar can buy.

 

There it is — massive inflation in 15 minutes: the time it takes to vote on the new policy.

 

Don't think this is possible? It's happened in the U.S. twice in the past 80 years. The first time was in 1933 when President Franklin Roosevelt ordered an increase in the gold price from $20.67 per ounce to $35 per ounce, nearly a 75% rise in the dollar price of gold.

 

He did this to break the deflation of the Great Depression, and it worked. The economy grew strongly from 1934-36.

 

The second time was in the 1970s when Nixon ended the conversion of dollars into gold by U.S. trading partners. Nixon did not want inflation, but he got it.

Gold went from $35 per ounce to $800 per ounce in less than nine years, a 2,200% increase. U.S. dollar inflation was over 50% from 1977-81. The value of the dollar was cut in half in those five years.

 

History shows that raising the dollar price of gold is the quickest way to cause general inflation. If the markets don't do it, the government can. It works every time.

I'm not saying it's going to happen anytime soon, especially with inflation beginning to show up here and there.

 

But if it doesn't prove sustainable and if we enter a deep recession at some point— which is very likely — the Fed could reach deep into its bag of tricks for the golden inflation cure.

================================================================================

 

Of Course this would also offset, to some degree, the newly birthed PetroYuan as well..................CL

[Muleslayer]

14 hours ago, bostonangler said:

Nice deflection

I learned from the best!

thank you B/A!