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NY Times: Annual Interest on Debt Will Soon Be More than the Entire Iraq War

John on November 23, 2009 at 12:45 am

A decade from now, we will spend more on debt service in one year than the total cost of the Iraq War thus far. From the NY Times:

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

Funny, Democrats haven’t seemed that worried about debt service until this month. I wonder why the sudden urgency?

The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years. On top of that, the Treasury has to refinance, or roll over, a huge amount of short-term debt that was issued during the financial crisis. Treasury officials estimate that about 36 percent of the government’s marketable debt — about $1.6 trillion — is coming due in the months ahead.

Clearly what’s needed is another stimulus.

This month, the Treasury Department’s private-sector advisory committee on debt management warned of the risks ahead.

“Inflation, higher interest rate and rollover risk should be the primary concerns,” declared the Treasury Borrowing Advisory Committee, a group of market experts that provide guidance to the government, on Nov. 4.

“Clever debt management strategy,” the group said, “can’t completely substitute for prudent fiscal policy.”

Mr. President, put down the socialist mop. You’re only making the mess worse.


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Category: Energy & Economy |

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