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.