It’s worse than you thought:
Despite a modest recovery, the 2010 budget deficit will be higher than the 2009 deficit. Nearly 42 cents of each dollar Washington spends will be borrowed. Even by 2020 – which Obama’s planners assume will be a time of peace and prosperity – annual deficits would still exceed $1 trillion. By that point, nearly a fifth of all taxes would go toward paying the interest on this record debt.
But it gets even worse. I have yet to see anyone take a hard look at where interest rates will go. We’ve been borrowing money on the cheap — short term. Our finances are going to hell and we’ll need to refinance that debt in short order. So we’ll find ourselves paying off the Visa card at 5% by putting it on the MasterCard at 8% and then on the Discover at 11%.
At some point, unless we get a Congress with some fiscal restraint, it all spirals out of control. And we might not even notice when it starts — for the first little while, inflationary spirals feel pretty good.