Federal debt to rise to $28 trillion
What, me worry? A new Congressional Budget Office report today predicts the federal debt will grow to $28 trillion in the next decade.
Government spending is projected to increase by 5 percent, or $178 billion, while government revenue is projected to increase by less than 1 percent, or $26 billion. The rise in government spending is attributed to a 6 percent increase in outlays for Social Security and Medicare, a 1 percent increase in discretionary spending, and an 11 percent increase in net interest.
With the American people apparently favoring candidates who want to increase that debt, I suspect this prediction is seriously understated.
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What, me worry? A new Congressional Budget Office report today predicts the federal debt will grow to $28 trillion in the next decade.
Government spending is projected to increase by 5 percent, or $178 billion, while government revenue is projected to increase by less than 1 percent, or $26 billion. The rise in government spending is attributed to a 6 percent increase in outlays for Social Security and Medicare, a 1 percent increase in discretionary spending, and an 11 percent increase in net interest.
With the American people apparently favoring candidates who want to increase that debt, I suspect this prediction is seriously understated.
I must unfortunately ask you for your financial support because I do not depend on ads and rely entirely on the generosity of readers to keep Behind the Black running. You can either make a one time donation for whatever amount you wish, or you sign up for a monthly subscription ranging from $2 to $15 through Paypal or $3 to $50 through Patreon.
Your support will allow me to continue covering science and culture as I have for the past twenty years, independent and free from any outside influence.
Your support is even more essential to me because I not only keep this site free from advertisements, I do not use the corrupt social media companies like Google, Twitter, and Facebook to promote my work. I depend wholly on the direct support of my readers.
You can provide that support to Behind The Black with a contribution via Patreon or PayPal. To use Patreon, go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation. For PayPal click one of the following buttons:
If Patreon or Paypal don't work for you, you can support Behind The Black directly by sending your donation by check, payable to Robert Zimmerman, to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
Or you can donate by using Zelle through your bank. You will need to give my name and email address (found at the bottom of the "About" page). The best part of this electronic option is that no fees will be deducted! What you donate will be what I receive.
“. . . and an 11 percent increase in net interest.”
And that’s the important number. I’ve posted before that we’ve borrowed so much money that the interest payment is outstripping outlays in some areas. We may be able to defer principle, but we have to pay interest. Anyone who’s had to make only minimum payments on credit cards knows that the interest will eat you alive, and that’s what’s happening with the Federal budget.
Blair–
Good point.
Interest rates have been artificially suppressed for essentially both of Obama’s terms, and the Fed is terrified of acting until after Obama leaves. Whomever is in Office next January, will face an interest-rate environment unlike anything we have experienced before.
(I had one of those 17% Mortgages in 1981, it was totally unreal. Thank god Reagan got a handle on Inflation and Interest Rates– but it wasn’t without a lot of pain for all concerned.)
I can already see the headlines next year, “Fed raises rates .25%, Woman, Poor, & Minorities hit hardest.”
The worst thing about it is that it is “financed” by the FED buying the debt and creating paper credits out of nowhere. That leads to huge mispricing and thus malinvestments throughout the entire economy, investments that transform more valuable inputs to less valuable outputs, crushing economic growth and redistributing wealth to the already rich who can receive these new credits. If the government could only borrow sound physical money which are already saved by others, the debt could never get this high, the lenders would require a steeply higher interest rate as the debt demand increases, putting a natural brake on the growth of government spending.
LocalFluff–
Good stuff! (You’ve definitely been reading up on Hayek & Mises!)
“Fear the Boom; Austrian Business Cycle Theory (ABCT) explained”
https://youtu.be/LPZvKv7uljc
“The Cluster of Errors – The Austrian Theory of Boom and Bust”
https://youtu.be/iBtzBb6rV1w
@wayne,
Perfect explanation by Lawrence H. White in your link! I’ll put him on my reading list.
Business and economics is where I have some academic education. But it took me several years, and the Lehman crash, to have a look outside of the school book and discover that Mises understands what an economy is. Isn’t it funny that one gets a masters degree in business/economics without understanding what money is? Like becoming a linguist without knowing what a letter is. The Austrian school was practically mainstream before Keynes. Then fascism took over. I’m afraid that neither Trump nor Johnson would change that substantially. But now the muslims’ war against us, the human kind, is the most important thing to fight back against.
I bet that Trump’s favorite dish to cook is omelette. If you’re familiar with the saying about what’s required to get it done.
Glad to see that you understand the obvious logic about our everyday social lives=economy too!