Trego's Mountain Ear

“We are now staring at almost $34 trillion in debt — numbers so big that they begin to be meaningless. But in the real world, it requires the Treasury to fork over $659 billion in interest payments annually, almost twice as much interest as it paid just two years ago.

But wait, there’s more! Annual interest payments on the debt could reach $2 trillion by 2030 if interest rates remain elevated and we continue to spend way beyond our means. That would make national interest payments the country’s second largest budget expenditure, gobbling up 30% of all federal tax revenue.”

We’ve been waiting for this moment – the power of compound interest has been increasing our national debt longer than my 74 years.  The article points out:

“Moody’s has lowered its assessment of the U.S. credit outlook from “stable” to “negative,” while Fitch and S&P have lowered their U.S. credit ratings.”

I realized as I read this that only a dozen years have passed since I included a Zimbabwe bank note in a retirement card for my department head – along with the comment, “So you can retire a millionaire.”  The bill cost me $6.83 US.  Zimbabwe demonetized that currency in September, 2015.  I didn’t realize that our politicians were only a few years behind Zimbabwe’s pols.

This article The Federal Government Has Borrowed Trillions, But Who Owns All that Debt? provides a chart as to who owns our national debt.  The article isn’t as current as yesterday, but, because of the power of compound interest is definitely worth reading.  It points out that, in 1970, foreign holders held about 5% of the national debt.  Now that number has risen to 30%.