Six-Month Federal Budget Deficit: $1.1 Trillion – WSJ
Interest on the public debt rose 43%, and now exceeds defense outlays.
By The Editorial Board | April 8, 2024 – Excerpt:
Washington continues to spend like deficits and debt don’t matter, and the politicians would rather you don’t know. For the record, the Congressional Budget Office reported Monday that the federal budget deficit for the first six months of fiscal 2024, ending in March, was $1.064 trillion. Enjoy it, because you’ll eventually pay for it in higher taxes…
The six-month interest payments of $440 billion exceeded the $412 billion in outlays for defense. As CBO has documented in other places, interest payments are expected to keep climbing as interest rates return to a more normal historical pattern.
None of this will come as a surprise to our readers. But it’s still useful to be reminded of the ugly facts, given how hard the political class tries to hide and ignore them.
Full article: on.wsj.com/3PW7qnA
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America’s debt ‘death spiral’ gives us $1 trillion reasons to act now
US is on track for Treasury to pay $1 trillion just in interest on debt
By E.J. Antoni Fox News | Published March 26, 2024 – Excerpts:
Interest on the federal debt is exploding much faster than the government predicted. It turns out Congress and the executive branch are as bad at projecting the future as they are at saving money…
While the Biden administration had projected a $1.6 trillion deficit for the current fiscal year, the Treasury has been borrowing at a $3 trillion annualized rate — almost twice the projected amount.
This additional debt, issued at today’s interest rates, will increase the Treasury’s annual interest expense by over $100 billion….
When it’s time to repay old debt, the Treasury simply issues new debt to cover repayment of what was originally borrowed, plus the accrued interest that’s due. How much debt is being rolled over in 2024? About $8 trillion worth.
All the Treasury bills being rolled over were issued within the last year, so they already have relatively high rates of interest — but not the Treasury notes or bonds, which were issued between two and 30 years ago. Much of that debt has an interest rate about half of current rates. As these notes and bonds are rolled over, the interest expense of the Treasury will continue skyrocketing….
Between new debt issued to cover current deficits and old debt being rolled over, the Treasury will auction about $10 trillion of debt this year, much of it having an interest rate of about 5%. This is less than one third of the federal debt but will cost $500 billion annually to service.
The rest of the debt, about 70%, will cost another $500 billion annually because the interest rates on the remaining notes and bonds are still relatively low. While that buys America some time to try and diffuse this debt bomb, it still means we’re paying over $1 trillion a year just in interest on the debt.
This is already the federal government’s third-largest single line item in the budget. It will grow to first place in just a few years. Interest on the debt is now so large that it exceeded 60% of all personal income taxes collected in February. This is the Treasury’s largest source of tax receipts, and most of it is being consumed by interest….
America is rushing headlong to this point of no return as multi-trillion-dollar deficits as well as maturing debt are all being issued at higher interest rates.
The desensitized public is unfortunately numb to the warnings, but they need to wake from their slumber because the day of reckoning is fast approaching. There’s not much time left to cut spending.
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April 2024 quote: “However human, envy is certainly not one of the sources of discontent that a free society can eliminate. It is probably one of the essential conditions for the preservation of such a society that we do not countenance envy, not sanction its demands by camouflaging it as social justice, but treat it, in the words of John Stuart Mill, as ‘the most anti-social and evil of all passions.’” – Friedrich von Hayek, 1974 Nobel Prize, Economic Science