Must see chart shows how U.S. debt service bill is going to skyrocket

goingbroke

We are literally tens of trillions of dollars underwater. To return to fiscal solvency is now impossible without overt default, or the covert default of a serious inflation.
Text

ksammut

Thanks for the article.

Notice the cost of interest alone. Imagine if the interest rates rose? A good portion of Federal taxes collected would have to go to just paying off the interest. This will not end well.

Bear

OK, here is the solution. Disband the armed forces and turn security over
to the Salvation Army.In place of Social Security, give the old folks a bag of
magic beans each month. For the poor and the sick, let them pull themselves
up by their boot straps. As for Congress, give them a 50% increase in pay
and pension benefits.

Konahead

<< <i>Thanks for the article.

Notice the cost of interest alone. Imagine if the interest rates rose? A good portion of Federal taxes collected would have to go to just paying off the interest. This will not end well.[/q


This will not end WEll indeed!

Higashiyama

Yes, interest rates will definitely rise, it is only a matter of when.

Here is a thought/question: we could balance the budget (and in doing so, reduce the likely magnitude of future interest rate increases) by making a 10 % across the board cut in spending. This cut would apply to everything - entitlements, social security, etc. It would seem politically unacceptable, even though receiving 90 % of your benefits is far better than living through chaos.

Question >>> would you support an across the board cut?

ksammut

<< <i>Yes, interest rates will definitely rise, it is only a matter of when.

Here is a thought/question: we could balance the budget (and in doing so, reduce the likely magnitude of future interest rate increases) by making a 10 % across the board cut in spending. This cut would apply to everything - entitlements, social security, etc. It would seem politically unacceptable, even though receiving 90 % of your benefits is far better than living through chaos.

Question >>> would you support an across the board cut? >>



I believe 2010's budget is approximately $3.5 trillion (that is the budget - we will spend more than that). A 10% cut in expenses would not be enough as on a very good year, the government collects $2.5 trillion in all taxes including FICA/Medicare. You would have to cut the budget by a third just to have expenses and receipts equal. Even with a 33% cut in spending, that would not slow the deficit from rising as interest alone will keep it going higher.

Cuts are needed but we would have riots (a lot like Europe) if too much cutting is done.Too many cuts and consumption will be hurt that much more causing an even worse economy. Some cuts plus strong growth in the economy to generate more taxes collected are the only ways to balance the yearly budget. But the problem still remains, what do you do with the growing deficit?

Ken

Higashiyama

Ksammut - yes, you're right - we would need a budget cut of about 10 % of GDP, not 10 % of budget. It's a really scary thought.

Bear

Where the heck is the locked box of money, when we need one.