A new study by the Committee for a Responsible Federal Budget says that, because of the increased spending and lower revenue from tax cuts, just the interest payments on the federal debt will hit $1 trillion a year in the next decade.
Last year, the federal government spent $263 billion, or 1.4 percent of GDP, on interest. That is a low level by historical standards due to historically low interest rates; over the past half century, interest has averaged 2 percent of GDP.
As recently as last June, the Congressional Budget Office (CBO) projected interest spending would grow to above $800 billion and nearly 3 percent of GDP by 2027 as a result of rising interest rates and growing debt levels. Since then, lawmakers have added an additional $2.4 trillion to deficits over the next decade, and it will most certainly result in higher interest payments.
By our estimates, annual interest spending will rise from $263 billion (1.4 percent of GDP) in 2017 to $965 billion, or 3.3 percent of GDP, in 2028. The 3.3 percent of GDP total for interest in 2028 would be the highest on record. The previous record was 3.2 percent of GDP in 1991, a time when debt as a percent of GDP was much lower but interest rates were much higher…
More significantly, they assume a current law baseline where the budget deal only increases spending for two years and large parts of the tax law expire after eight years or sooner. Under our “Alternative Scenario,” which assumes policymakers borrow an additional $3.6 trillion through 2028, interest spending will rise to $1.05 trillion, or 3.6 percent of GDP, by 2028.
This is the pattern we have long seen from the Republican party. They scream about fiscal responsibility when a Democrat is in the White House, but when they hold power they spend like drunken sailors with a stolen credit card, and then cut taxes, and thus revenue, at the same time. This is really, really basic math — if you reduce what you take in and increase what you pay out, you get a deficit. Math 101. And yet they do it, every single time, and the result is always the same.
Even Reagan, that alleged enemy of big government, proposed higher budgets than those approved by Congress, even when it was controlled by Democrats. And the major culprit here? Defense spending. Or should I say “defense” spending, because we haven’t had to actually defend ourselves in a long time. It’s spending for military aggression, for invading countries that have done nothing to harm or threaten us, mostly.
We spend 47% of all the money spent in the entire world on the military, but that still isn’t enough for them. Because, to be quite honest, it has nothing to do with national security and everything to do with paying back the defense contractors who give them the money that keeps them in office. And they resort to endless fearmongering and demagoguery to scare us into going along.
Seriously, was there anyone prior to Bush’s incredibly dishonest propaganda campaign for the invasion of Iraq who sat up at night in fear that Saddam Hussein was going to attack us, much less destroy us or take over the country? If so, they were fools. And after the propaganda campaign, a great many were fools.