Interest on the federal debt is exploding much faster than the government predicted.
Much more alarming than the mathematical deficiencies of government is the rate at which America is running out of time to solve its debt crisis.
Ignore Soaring Federal Debt All You Want, but You're Paying for It 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.
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.
Interest on the debt is now so large that it exceeded 60% of all personal income taxes collected in February.
Imagine a family that constantly spends more than it earns and uses debt to finance its profligate spending.
All those debts accrued by the family carry interest payments which grow larger and larger.
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.
Most people aren't paying attention because so-called fiscal conservatives spent the last four decades acting like the boy who cried wolf and repeatedly claiming this debt death spiral was imminent.
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