Interest payments on the debt is the next big crisis

[Madison320]

I've been saying for like 10 years now that the debt and printing would finally lead to price inflation and the problem is when we raise rates to fight the inflation, we won't be able to afford the interest payments.

Well we finally got the price inflation 2 years ago and now the interest payments on the debt is skyrocketing. I started watching the ratio of interest payments/total tax revenue. Right now our interest payments are 16% of our revenue. I think it'll be maybe 20% by year end and maybe 30% by next year end. I'm guessing somewhere around 30% is about as high as it can go before the government panics and starts printing.

I still think something else will break first and force the Fed to print but if not the interest payments HAVE TO. I'll be updating the percent as it increases.

[Madison320]

Holy crap the debt is skyrocketing. We just blew thru 33.5 trillion. We might hit 40 trillion by the end of next year.

[oyarde]

Once you get it started it would be too difficult to stop. Interest payments now on pace to exceed defense spending in a couple years ( estimates for 2024 are about 740 billion in interest and 920 billion on defense ) . Basically every cent not going to defense , medicare and social security would need scrapped now . You'd get like one vote in the senate.Collapse will not be avoided . Will it be a decade ? or two ? those are the apparent choices and ea person gets to guess for themselves. From 2000 to 2023 the debt was increased about 450 percent while GDP averaged 1.9 percent. All that money printing , deficit spending- debt is what gave us our three past yrs of third world inflation and destroyed the american dream.

[Madison320]

Once you get it started it would be too difficult to stop. Interest payments now on pace to exceed defense spending in a couple years ( estimates for 2024 are about 740 billion in interest and 920 billion on defense ) . Basically every cent not going to defense , medicare and social security would need scrapped now . You'd get like one vote in the senate.Collapse will not be avoided . Will it be a decade ? or two ? those are the apparent choices and ea person gets to guess for themselves. From 2000 to 2023 the debt was increased about 450 percent while GDP averaged 1.9 percent. All that money printing , deficit spending- debt is what gave us our three past yrs of third world inflation and destroyed the american dream.

Yeah, I've read that but I think it's a lot closer than that. Interest payments are already well over 700 billion. According to the debt clock interest payments on the debt are going to pass defense in a few months. In a couple years interest payments will be the number one item unless the Fed starts printing and buying up the debt.

Think of it this way. In a couple years the debt will hit 40 trillion. At the current trajectory we'll easily be paying 5% interest on that. That's 2 trillion a year and 50% of our tax revenue!

I've been reading these "debt scare" articles over the past decade and it's almost like they're trying to do the opposite and make it seem like a problem well into the future. Their estimates are always orders of magnitude wrong. 10 years ago they were estimating we'd hit 40 trillion by like 2050. Now it's 2024. This crisis is happening in the next couple years, not off in the future.

[Madison320]

Unfortunately I don't have the best data to track this. So according to the debt clock interest payments fell from about 720 billion down to 670 billion. Which of course makes no sense. I know it's because they estimate the number until they get hard data but it still doesn't seem right. I've heard other estimates of around 800 billion for interest payments. Anyway using the debt clock the percent of interest payments fell to 15% of tax revenue. I still expect it to be up around 20% by year end and more than defense spending.

[Madison320]

We just hit 35 trillion in debt! Yay!

Interest payments on the debt is not going up as fast as I thought it would but it's at 907 billion and about to pass defense spending at 912 billion. That's 18% of tax revenue.

[GlennwaldSnowdenAssanged]

We just hit 35 trillion in debt! Yay!

Interest payments on the debt is not going up as fast as I thought it would but it's at 907 billion and about to pass defense spending at 912 billion. That's 18% of tax revenue.

This is not a problem.
What you fail to understand is that the USA gets to print its own money.
All they have to do is print 40 trillion and we would be debt free!

[Todd]

Holy crap the debt is skyrocketing. We just blew thru 33.5 trillion. We might hit 40 trillion by the end of next year.

Yeah and if Trump wins you can expect it to push most likely over 50 by his terms end. But hey, he closed the border

[Madison320]

Yeah and if Trump wins you can expect it to push most likely over 50 by his terms end. But hey, he closed the border

I agree. That's the unforgivable problem with trump. A democrat would be just as bad, unless republicans take the house and senate. Then they find religion.

[GlennwaldSnowdenAssanged]

Trump will raise the debt and have China pay for it.

[Todd]

Trump will raise the debt and have China pay for it.

how did that work out 2016 to 2020?

I think people forget that the hard part about selling the bull$#@! this time around is we have 4 years of evidence that the Swamp Drained and fiscal conservatism are not "Trumpology".

[Invisible Man]

A democrat would be just as bad

One would think that. But is it really so? When it comes to increasing spending has Biden been as bad as Trump?

We could possibly say that the massive spending of 2020 would have been at least as bad that same year with a Democrat in office. But that's a hypothetical. When we compare how much Trump actually increased federal spending (and yes, this was Trump's doing, not just Congress's) to how much Biden did, it's no contest. Trump's increase was far larger.

https://www.statista.com/statistics/...cal-year-2000/

[Madison320]

One would think that. But is it really so? When it comes to increasing spending has Biden been as bad as Trump?

We could possibly say that the massive spending of 2020 would have been at least as bad that same year with a Democrat in office. But that's a hypothetical. When we compare how much Trump actually increased federal spending (and yes, this was Trump's doing, not just Congress's) to how much Biden did, it's no contest. Trump's increase was far larger.

https://www.statista.com/statistics/...cal-year-2000/

Historical spending data shows little difference between the parties.

C'mon man. If Biden were in charge the spending increase would be the same, it's not hypothetical at all. Remember that democrats criticized Trump for not doing enough!

I'm not defending Trump, I've always said he was a bad president because of the spending. We need someone who might actually veto a spending bill.

[Invisible Man]

Historical spending data shows little difference between the parties.

Historical spending in the period of the tenures of Trump and Biden shows a very big difference between them. Federal spending jumped from $3.98T in 2017 to $6.82T in 2021. And then from that point it has only gone up to $6.94T in 2024, and is only projected to be $7.27T in 2025. I think you would have to go back to WW2 to find the last time federal spending increased as dramatically in a 4-year period as it did under Trump. But under Biden, indexed to inflation, federal spending actually went down, and that's only accounting for inflation and not the additional mitigating factor of population growth.

To make it worse, spending actually went down in absolute terms from $6.82T in 2021 to $6.13T in 2023, the last year whose budget was passed when Democrats controlled both the WH and the HOR. It was only after Republicans took control of the House that federal spending shot back up again this past year.

C'mon man. If Biden were in charge the spending increase would be the same, it's not hypothetical at all. Remember that democrats criticized Trump for not doing enough!

That's what they said with their words. But that didn't translate to actually increasing spending when they had their chance in Biden's tenure.

The jury is not still out. If Biden and Trump are in a taxpayer money spending contest, Trump wins hands down.

[Madison320]

Historical spending in the period of the tenures of Trump and Biden shows a very big difference between them. Federal spending jumped from $3.98T in 2017 to $6.82T in 2021. And then from that point it has only gone up to $6.94T in 2024, and is only projected to be $7.27T in 2025. I think you would have to go back to WW2 to find the last time federal spending increased as dramatically in a 4-year period as it did under Trump. But under Biden, indexed to inflation, federal spending actually went down, and that's only accounting for inflation and not the additional mitigating factor of population growth.

To make it worse, spending actually went down in absolute terms from $6.82T in 2021 to $6.13T in 2023, the last year whose budget was passed when Democrats controlled both the WH and the HOR. It was only after Republicans took control of the House that federal spending shot back up again this past year.




That's what they said with their words. But that didn't translate to actually increasing spending when they had their chance in Biden's tenure.

The jury is not still out. If Biden and Trump are in a taxpayer money spending contest, Trump wins hands down.

The flaw in your logic is you're not factoring in the big jump in covid spending starting in 2020.

If spending had kept increasing as it had the first 3 years under Trump we'd be around 5.6 trillion but we're at 6.1 trillion by the end of 2023. And the reason spending is starting to go back up is that the temporary covid spending finally ended.

Both parties are bad, you'd have to be a partisan to assume either party was worse than the other.

[Invisible Man]

The flaw in your logic is you're not factoring in the big jump in covid spending starting in 2020.

If spending had kept increasing as it had the first 3 years under Trump we'd be around 5.6 trillion but we're at 6.1 trillion by the end of 2023. And the reason spending is starting to go back up is that the temporary covid spending finally ended.

Both parties are bad, you'd have to be a partisan to assume either party was worse than the other.

That’s not a flaw in my logic. It’s a historic fact that it was Trump who pushed through that spending in 2020. He is the one who took advantage of the opportunity that COVID gave him. This isn’t an excuse that makes it any less bad. It’s not like he had to do it.

[acptulsa]

[Madison320]

That’s not a flaw in my logic. It’s a historic fact that it was Trump who pushed through that spending in 2020. He is the one who took advantage of the opportunity that COVID gave him. This isn’t an excuse that makes it any less bad. It’s not like he had to do it.

I agree. A good president would not have panicked and spent all that money. I'm just saying Biden is not a good president and he would've done the same thing.

[Invisible Man]

I agree. A good president would not have panicked and spent all that money. I'm just saying Biden is not a good president and he would've done the same thing.

I agree there.

[Matt Collins]

https://youtu.be/tHLgPLAESe0?si=NnyO7bkeqauXYMhz

[Matt Collins]

SOURCE:

https://www.voronoiapp.com/markets/U...Trillion--1981

[Madison320]

Interest on the debt just passed defense spending.

https://www.usdebtclock.org/

Remember all the "experts", like Janet Yellen, who said interest on the debt wasn't a problem because interest rates are so low?

Of course it's actually the opposite. If rates were historically high and the interest payments were affordable then we wouldn't need to worry. But when rates are at all time historical lows you don't assume they can't ever go up. Unless you're an idiot or a liar.

[acptulsa]

Unless you're an idiot or a liar.

Don't underestimate Janet Yellen. She's fully capable of being both at the same time.

[Invisible Man]

SOURCE:

https://www.voronoiapp.com/markets/U...Trillion--1981

Notably, the year within that timeframe in which the most debt was added was 2020 itself.

[Madison320]

Notably, the year within that timeframe in which the most debt was added was 2020 itself.

That's something not factored into the lockdown. Debt is cumulative. How much damage will be caused by carrying all that additional debt into the future? How many lives lost?

[acptulsa]

[Madison320]

It might not be a bad thing if harris wins because we're probably going to get another surge of price inflation even worse than the last one under biden. My guess is when we finally get hyperinflation (or at least really high inflation) we're going to veer in the opposite direction of whoever's in charge. So if trump is in charge we may elect a hard core socialist. If harris is president we may go towards free markets.

The downside of harris is the supreme court and the fact that if the stuff really hits the fan her impulse is going to be more government. At least there's a chance trump might do the right thing.

[Matt Collins]

It might not be a bad thing if harris wins because we're probably going to get another surge of price inflation even worse than the last one under biden. My guess is when we finally get hyperinflation (or at least really high inflation) we're going to veer in the opposite direction of whoever's in charge. So if trump is in charge we may elect a hard core socialist. If harris is president we may go towards free markets.

Kind, of, maybe.... Trump will absolutely be better for the economy, there is no doubt about that. But keep in mind some of his policies are anti-free market too (think tariffs and spending). Will he do anything to curb spending and inflation? No, probably not. Maybe, but I wouldn't bet any money on it. Pretty much everything Kamala will do will be harmful to the economy. And with history, when hyperinflation happens, authoritarianism is usually the result and that can be both left and right leaning, whatever that means. Hopefully it doesn't happen but we very well may be past the point of no return.

[acptulsa]

Will he do anything to curb spending and inflation? No, probably not. Maybe, but I wouldn't bet any money on it.

Huh, ya think? They're trying to sell themselves as something they're not.



Trump ran a bigger deficit than Biden, had to print more money to do it, and therefore bears more responsibility for this inflation than Biden. It's a simple fact

[Madison320]

Trump ran a bigger deficit than Biden, had to print more money to do it, and therefore bears more responsibility for this inflation than Biden. It's a simple fact

That's true, and I'm always saying trump was a bad president because of that but biden would've spent the same if covid hit when he was president. They both suck but I think there's a better chance that trump would do the right thing if we got hyperinflation. I think biden/harris first move would be price controls. I don't see trump doing that.