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Notes -
So, how doomed should I be about the national debt situation in the US?
It seems pretty hopeless. Even if we have excellent growth (>2%), and do something politically impossible like increase taxes by 2% and cut spending by 2%, we will still probably become unable to service the interest on the debt by 2032 or something. Do I have that right?
Anyplace safe? Seems like Europe just does as badly if not worse than the US if the US defaults.
Maybe it won't be so bad? #cope #cope #cope
Source?
The Government Accountability Office's most recent report on this topic is here. It projects (in figure 11) that, even in year 2054, interest payments still will be "only" 27 percent of federal spending.
napkin math. let me see why I'm so off from the GAO report
UPDATE: I don't quite understand the takeaway from Figure 11. How does interest on the debt growing to 27% of federal "spending" mean we would find the revenue to keep paying it? Isn't it more clear to say that our liabilities would grow such that 27% of them are interest payments alone?
In 2025, we already currently deficit spend $2t to meet our $8t a year in obligations.
What figure 3 of that report makes clear is that the size of our interest payments will grow out of proportion with revenue growth. That's the scary part IMO. It's already happening and I think even higher GDP growth + the other politically impossible things I mentioned in my OP wouldn't help us catch up with it.
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