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If current laws remain unchanged, Federal government debt will jump from this year's estimate of 98% of GDP to 107% by 2029, and to 181% by 2053, the Congressional Budget Office (CBO) warned in a report on Wednesday.
"Such high and rising debt would slow economic growth, push up interest payments to foreign holders of US debt, and pose significant risks to the fiscal and economic outlook", the CBO wrote.
Debt held by the public represents the amount that the Treasury has borrowed from domestic and foreign investors to support government activities and meet its basic obligations such as healthcare programs and social security. As of December 2022, the public debt stood at 78% of the gross federal debt.
Total US debt now stands at over $32 trillion, after the government suspended the debt ceiling earlier this month to avoid a default.
At the same time, the US Federal Reserve has implemented a series of interest rate hikes in recent months in an attempt to curb the nation's worst inflation in decades. The Fed interest rate is currently 5% to 5.25%, up from 0% in early 2022.
In the first quarter of this year, interest payments by the US government spiked to 3.5% of GDP, up from 2.4% in the same period in 2022, market strategist Charlie Bilello said earlier this month, noting that this was the largest annual increase on record.
The CBO report also predicted that the gap between spending and revenues will generally increase over the coming decades, reaching 10% of GDP by 2053.
According to the budget group, rising interest rates and primary deficits will cause interest costs to nearly triple in relation to GDP over the next three decades.
Reader Comments
The money pushers are like a dead weight on a chain tied to our ankles as we get dumped in to swim with the fishes....thing is....thing is....it ain't the debt of the citizens - tis debt owned by the federal reserve I reckon - they have to make payment - not us.
Or maybe tis time for a big jubilee?
Either way, tis not the debt of the citizens to pay nor for the citizen to forgive, but it ain't the citizens debt - tis the debt of the Federal Reserve - let them drown with what they made.
This is the way it works.
I'm the FED.
YOU are the US Govt.
I print your money. If you need money you HAVE to come to me.
You borrow 1$.
You'll need to pay it back. How do you do it?? You need borrow MORE.
So now you've paid the 1$ back....but here's the catch- the dollar you borrowed to pay back the original dollar is also a loan - so you need to pay that back too. So you borrow another.
And ........ there's interest on that $1 Money Changers in the temple wailinK and gnashinK of teeth.. OY! We still have an outstanding loan. How are you going to pay it back??
You borrow more....at interest. etc, etc, etc, Here that rumble? It's the snowball of debt coming down the mountain!!!
And the shekel grabbers wring their hands with sinister smiles on their faces while countries are captured in their yoke of debt slavery. Once caught, they dare not speak out against the Chosen Tribe or the mighty God, Rothschild (who owns all the central banks of the world, including the IBS) will turn their economy into a desert.
Money doesn't grow on trees, who needs trees? It's made simply by turning on a switch. Imagine the racket when they go to e-money. Interest on NOTHING!