The U.S. gross federal debt currently stands at $17.548 trillion, and net interest payments to our creditors are the fastest-growing item in the budget. In 2014, the Congressional Budget Office projects that the nation will spend $233 billion on interest payments. By the end of the budget window in 2024, however, CBO forecasts that interest payments will nearly quadruple to an astonishing $880 billion. Every dollar spent paying our creditors is a dollar wasted—money for which we get nothing in return. Interest payments threaten to crowd out every other budget item.
To put the $880 billion, single-year interest payment in perspective, here is what we currently spend on other budget items:
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Federal Courts – $7.4 billion
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Department of Education – $56.7 billion
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Secret Service – $1.8 billion
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Food Inspection – $2.3 billion
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Census Bureau – $1.0 billion
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Border Patrol – $12.3 billion
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National Parks – $3.0 billion
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NASA – $17.6 billion
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Centers for Disease Control – $7.1 billion
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Federal Prison System – $6.9 billion
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Workplace Safety Inspections – $0.9 billion
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Immigration and Customs Enforcement – $5.6 billion
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FDA – $2.6 billion
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Federal Highway Budget – $40.4 billion
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Coast Guard – $10.0 billion
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Small Business Loans – $0.9 billion
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Veterans’ Health Care – $55.3 billion
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FBI – $8.3 billion
Every debt incurred today will be paid off in the future. The graph above may be shocking to some, but it’s only a very small part of the picture. This is just interest on debt, and doesn’t even include the costs of repaying the principal. Of course, the principal never really gets repaid as the government just borrows afresh to paper over its old debts, but the interest must be covered lest savers stop lending money to the government.
Nor is this only a concern for the future. Last year the government spent more on interest payments (c. $700 bn.) than it did on Medicare (a little under $600 bn.).
