Pictured: Left – Representative Dean Phillips, a Dem who cares about the debt. Right – Share of world debt (Source: The Visual Capitalist)
Just The News:
$85,210 per person – Population of the United States is about 328,000,000
“We will be in a boatload of trouble when we see interest rate spikes,” Democratic Rep. Dean Phillips says, referring to the interest costs on the national debt
A bipartisan group of lawmakers is warning that the national debt –– now estimated to total $85,210 per person –– poses an imminent threat, especially if interest rates spike.
The U.S. government has spent around $6 trillion during the coronavirus pandemic, in addition to regular government appropriations. The $6 trillion figure does not count the $1.9 trillion American Rescue Plan that President Biden signed a few weeks ago. The deficit set a record in FY2020 at $3.13 trillion. And the national debt has hit a record $28 trillion.
Maine Independent Sen. Angus King, a member of the Senate Budget Committee who caucuses with the Democrats, said that “we’ve got a problem” as a country with the rising deficit and national debt, particularly around the interest on the debt.
“I’m concerned about it in terms of generational equity, the long-term implications for your generation and the generation that comes after,” King said during a discussion organized by the Millennial Debt Foundation. “And it bothers me from a, sort of, ethical point of view that where my generation is spending the money, spending your money.”
According to the Treasury Department, interest payments on the debt totaled $522.7 billion in FY2020 alone.
“It’s a cheap time to borrow and some people are using that as a reason to borrow. The problem that comes is our interest rates flow. The U.S. has the ultimate adjustable rate mortgage, which is the rates can change,” King said. “And if the rates go back to 4 to 5%, which is where they’ve been historically, we’re in a heap of fiscal trouble. The math is pretty easy. Every 1% is $250 billion a year of interest costs. So 4% is $1 trillion dollars; 5% is $1,250,000,000,000, which happens to be the entire current discretionary federal budget.”