The Leviticus 25 Plan – the most powerful economic acceleration plan in the world: economic scoring summary.
Interest expense on projected deficits 2026-2030
Federal debt has increased from $22.1 trillion in 2020 to $35.46 trillion as of December 2024. Federal debt held by the public is reported to be $27.783 trillion, with the remainder, $7.677 trillion of intra-governmental debt outstanding, which arises when one part of the government borrows from another. This intra-governmental debt interest expense will be omitted from this calculation, since those dollars are not expensed directly.
The Center Square, Dec 26, 2024: As the debt grows, so does the average interest rate the government is paying. That rate jumped from 2.378% five years ago to 3.155% now. Since one of the key drivers of U.S. debt growth is interest on the debt, a vicious spending cycle has been created, one that lawmakers in the U.S. House Committee on the Budget recently called “completely unsustainable.”
The Bear Traps Report, Dec 30, 2024 – Excerpts:
“CBO data, Bloomberg. The average weighted coupon on the U.S. debt load is about 2.7% vs. over 4.5% for 10-year U.S. Treasuries. As bonds mature, they get refinanced at much higher yields.”
“$10Tr of Debt Refinancing Next Year – In 2024 Treasury faced around $10Tr of maturing debt. To refinance this debt, it issued a whopping $26Tr of bills and bonds. More than 84% of that paper was short-term bills with a maturity of 6 months or less. Treasury keeps re-issuing bills with a maturity of 4 to 8 weeks or 3,4 to 6 months, which are the most popular maturities in a continuing, ever-increasing roll down of the debt, day after day, month after month.”
“ALERT – By issuing nearly a colossal load of extremely short-term bills, Janet Yellen succeeded in suppressing bond volatility in an election year and, in our view, strategically placing that bond market volatility into 2025 after the election. You can “why” see above, she wanted LESS long-term paper in circulation markets in the election year.”
“Now, in 2025 – this paper has to be rolled over and termed out into longer-dated bonds. The USA is behaving like a financially trapped emerging market country. Living on the “front-end” of the yield curve is a VERY dangerous game.”
“Incoming Stress Points – In 2025 the U.S. Treasury faces $9.6Tr of maturities in their so-called publicly held debt. In Q1 alone — the government faces $5.58Tr of maturities (bonds coming due, redemption), but 86% of those are short-term bills that the Treasury department rolls over into new 4-week, 8-week, 3,4, or 6-month bills, among others.”
“As a result, almost daily bill auctions are coming to a theater near you, as the Treasury Department mindlessly keeps pushing new paper into the market to pay back the colossal amount of maturing debt.”
This projection will assume an average monthly interest rate of 3.13% for 2025, and a conservative average monthly interest rate of 3.00% in calculating the interest expense to be eliminated during the budget surplus years of 2026-2030.
This projection also assumes that annual federal budget deficits will be funded through Treasury Issuance at an average of 79.0% rate for Debt Held by the Public.
Year Annual Deficit/2
2025: $1.938 trillion/2 X .79 X .03 = $22.965 billion
2026: $1.851 trillion/2 X .79 X .03 = $21.934 billion
2027: $1.756 trillion/2 X .79 X .03 = $20.809 billion
2028: $1.942 trillion/2 X .79 X .03 = $23.013 billion
2029: $1.949 trillion/2 X .79 X .03 = $23.096 billion
2030: $2.193 trillion/2 X .79 X .03 = $25.987 billion
Recapture: Total interest expense eliminated by projected operating surpluses: $114.839 billion
Source(s): https://www.thecentersquare.com/users/profile/therese%20boudreaux https://www.thebeartrapsreport.com/blog
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