Tag Archives: Interest expense

The US Is Spending $1.5 Billion On Debt Interest Every Day, by Tyler Durden

That $1.5 billion a day figure, already exorbitant, is only going to go up. From Tyler Durden at zerohedge.com:

Several weeks ago, when looking at the US budget data for the recently concluded (Sept 30) Fiscal 2018, we noted that the most troubling observation in the latest data (besides the growing deficit, rising spending and shrinking tax revenues) was that the government paid $523 billion in total interest in fiscal 2018, the highest on record.

Alas, this is just the start, because to fund the fiscal stimulus that has already been enacted, US deficit spending is only set to soar higher, with the resulting interest expense rising above $600 billion in 2019.

But the truly scary nature of this number is in the context of all other G-7 nations: as the following chart from Deutsche Bank’s Torsten Slok reveals, spending on interest expense in the US is now just about $1.5 billion per day, which at current interest rates is orders of magnitude higher than what all other G-7 developed nations spend on interest.

That too is just the start: as Slok notes, “US government last year on average paid $1.5bn each day in interest payments, and this is rising toward $2bn per day over the coming years.

And that’s with rates still relatively low due to the maturity schedule of US debt, which however is only set to rise as existing debt issued over the past decade during record low rates matures and is replaced with debt yielding far more.

How long before this becomes the most politically sensitive economic topic, and how long before the president threatens to fire Powell unless he, too, starts monetizing the debt?

 

 

 

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The US Spent A Record $523 Billion On Debt Interest In Fiscal 2018, by Tyler

Here’s a new record that will be broken next year if interest rates stay the same or move higher. From Tyler Durden at zerohedge.com:

Earlier this week, when the US closed fiscal 2018 on September 30, we reported that US gross national debt jumped by $84 billion on September 28, the last business day of fiscal year 2018; with this last push higher, total gross national debt in fiscal 2018 rose by $1.271 trillion to an all time record of $21.52 trillion.

What is more stunning, is that only six months ago, on March 16, it had for the first time risen above the $21-trillion mark, while a year ago, at the end of September 2017, it was just $20.2 trillion.

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