Obama and his party want Americans to believe they do not have a spending problem, despite the numbers they continue to produce. The CBO is pointing out a scary fact. The federal government will be borrowing an additional $1 trillion dollars to cover the interest payments on the current debt. The CBO also informs us that the federal budget deficits will continue to grow up and through 2023.
In its annual Budget and Economic Outlook, the CBO said debt held by the public will be bigger by 2023 than in any year since 1951 and will be at 77 percent of gross domestic product (GDP) by 2023, far above the 40-year average of 39 percent of GDP.
It’s already here and we don’t have to wait til 2023.
As a result, the CBO report said, the federal government’s interest costs “will be very high” and will be rising. Interest costs will more than double by the end of the ten-year forecasting period and will be at their highest share of GDP in the past five decades.
Even the CBO is spinning the truth. The Debt-to-GDP is already over 100% so that 77% projection is off just like most of the CBO projections (educated guessing). For those who voted for Obama, let me do the math for you. GDP in 2012 was $15.1 trillion or so. The National Debt is $16.4 trillion meaning the debt is higher than our gross domestic product. The Debt ($16.4 trillion) is already above 100% of our GDP ($15.1 trillion).
So how much will need to be borrowed or printed to cover the interest payments?
In December, the Treasury Department reported that total interest bearing debt owed by the government carried an interest rate of 2.523 percent. Last year’s interest payments on that debt totaled $360 billion. If interest rates overall reflect the CBO’s forecast for the benchmark, interest rates payments alone will reach one trillion dollars by 2017.
Just current debt would require interest payments of 2.5 times 2012 levels or $890 billion. You can add another $100 billion in interest costs for deficits accumulated between 2013 and 2017.
$1 trillion to cover Obama’s $1 trillion budget deficits. Older Americans better be concerned. I’ve noticed that many left-wing economist and think-groups are pointing to the increased cost of “entitlements” such as Social Security and Medicare. These are not entitlements since these taxes are taken out of people’s paychecks. Entitlements are food stamps and other welfare programs a record number of Americans are addicted to.
These numbers are scary except to progressives.