In case you haven’t noticed, over the past few years the federal government has been racking up deficits like a bunch of drunken sailors on shore leave–and now we’re starting to reap the consequences.
The chart above is from the St. Louis branch of the Federal Reserve Board. It is based on data from the U.S. Bureau of Economic Analysis and shows interest payments by the federal government over time. That big spike at the right side of the chart means that interest payments have soared over the past three years–just about doubling since 2020. The trajectory is, to put it mildly, alarming.
A recent article from CBS News puts the issue into some context. In the last decade, the total amount of outstanding federal debt has almost doubled, from $17 trillion in 2014 to $33 trillion in 2024. We’ve got to pay interest on all of that debt, of course, which is why–along with increased interest rates on the debt–we’re seeing this shocking spike in total interest payments. The CBS News article reports that interest payments this year will exceed the budget for national defense, which may be the first time that has ever happened in our history. And every dollar we pay in interest is a dollar that we can’t spend on anything else–including, for example, actually paying down the staggering national debt.
As the CBS News article reflects, some purported experts say we should be concerned about the spiraling debt and interest rate costs, whereas other purported experts say such concerns are overblown. It just shows that you can find public policy “experts” on every side of every issue. But anyone who deals with their own personal finances knows that being in debt really limits your options and increases your risks, especially if some kind of economic shock happens. I think that is as true for our federal government as it is for the average American family. The risk is that, at some point, you just can’t borrow any more–or if you can, you’ve got to pay crippling interest rates to do so.
We are handing future generations a tremendous burden that is going to leave them paying a very big bill and dealing with unhappy consequences. It’s unfair and irresponsible–and it’s maddening that none of our political leaders seem to particularly care about it.
Webner House 