The U.S. government has borrowed hundreds of billions of dollars since 2019 to fund health care and an array of stimulus and rescue programs during the COVID War.
Now the bill is coming due on the $31 trillion the government owes, Washington Post columnist Allan Sloan noted in a 13 October analysis.
The government’s interest payment for the current fiscal year will balloon to $580 billion, compared to $399 billion the previous year, Sloan noted.
The amount of interest due next year would equal 2022’s budget for Medicaid, which pays health care costs for roughly 25 percent of Americans.
The government continues to borrow at a time when the U.S. Federal Reserve is aggressively raising interest rates to control inflation. Interest rates have zoomed from 0.25 percent to as high as 3.25 percent this year, a 13-fold increase, and will rise higher when the Fed meets again early next month.
The Congressional Budget Office last projected the government’s interest rate expense on 2 May.
Rates have rocketed up since then.
The yield on 30-day treasury notes was 2.5 percent higher in early October than on 2 May. The one-year yield was up 2 percent from that date and the 10-year yield had gained almost a percentage point.
Yields on notes and bonds are the interest rates the government pledges to pay.
For fiscal 2024, the interest bill could total $719 billion, Sloan figured.
The CBO has not updated its projection and is not scheduled to do so again until January.
“When the next update comes, the interest numbers may well be high enough to knock your socks off,” Sloan warned.
TREND FORECAST: While this is new news to Washington Post readers, it is old news to Trends Journal subscribers. Besides the United States paying more for debt as interest rates rise, the fish rots from the head down.
From developed and emerging markets that have borrowed trillions, to real estate developers and those without fixed mortgage rates… the higher interest rates rise, the more they have to pay to cover their debt. And as for emerging markets and nations whose currencies are declining against the U.S. dollar, the deeper their currencies fall, the more money they need to cover their debt. Therefore defaults will escalate as the world sinks into Dragflation.