September 27, 2018

SUSTAINABILITY: As Debt Rises, the Government Will Soon Spend More on Interest Than on the Military. “Tax cuts, spending increases and higher interest rates could make it harder to respond to future recessions and deal with other needs.”

The run-up in borrowing costs is a one-two punch brought on by the need to finance a fast-growing budget deficit, worsened by tax cuts and steadily rising interest rates that will make the debt more expensive.

With less money coming in and more going toward interest, political leaders will find it harder to address pressing needs like fixing crumbling roads and bridges or to make emergency moves like pulling the economy out of future recessions.

Within a decade, more than $900 billion in interest payments will be due annually, easily outpacing spending on myriad other programs. Already the fastest-growing major government expense, the cost of interest is on track to hit $390 billion next year, nearly 50 percent more than in 2017, according to the Congressional Budget Office.

Tax cuts are the least of our debt problem given that Washington still enjoys record revenues, year after year. What Washington has is a spending problem, and zero appetite for addressing it.

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