Think the U.S. deficit is bad? Check out the interest payments

February 26, 2009

US TREASURY PAULSONFor those who are worried about the $1.75 trillion deficit that President Barack Obama projected the government would run in fiscal 2009, wait until you see what the interest on the growing U.S. debt will be.

The U.S. debt is roughly $10.6 trillion and the government spent $253 billion servicing it last year. With the mounting yearly deficits, that cost is skyrocketing.

During the debate over the $787 billion economic stimulus plan aimed at pulling the U.S. economy out of its downward spiral, Republicans argued that the cost was really over $1.1 trillion because of the cost to service the additional debt.

Lest folks think that current low borrowing costs would make the burden a little lighter, Obama’s fiscal 2010 budget projected that during his upcoming four years in office the cost will run roughly $1 trillion.

How does spending $447 billion just in interest payments on the debt in 2013 sound? And $694 billion in 2019 alone? If you want to see those shocking figures in black and white, see page 117 of Obama’s budget. It’s worse than opening your monthly credit card bill and looking at the finance charges on the unpaid balance.

For more Reuters political news, click here.

- Photo credit: Reuters/Jim Young (A government employee looks over a sheet of partially printed U.S. currency.)

21 comments

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Hard to believe we are only at the beginning of the collapse of the US economy. Obama owns this and doesn’t seem bothered at all. He is either ignorant to basic economics or is intentionally destroying the economy. I have laid off all the Obama supporters and now have to look at making more cuts to simply survive. His actions continue to create a downward death spiral that will take a generation at least to recover from. The best we can hope for is for 2010 elections to usher in a congress that can quickly put a stop to this madness and reverse the already disastrous decisions.

Posted by Ellis Wyatt | Report as abusive

The U.S. deficits will bankrupt the United States, as the global economic crisis grows worse. America is borrowing from her children and their descendants rather than live within her means.

NOW you talk about the interest on the debt? Democrats yelled about it every year from Reagan onwards, and Clinton was the only one to NOT increase it substantially, and Bush Jr. more than doubled it, but now that Obama’s inherited it, the debt is a big deal to you. Thanks for waking up.

Posted by Steverino | Report as abusive

I just saw a movie on HBO, showing how US won the battle to push the Soviet out of Afgan, by initially raising USD5m to USD10m.. when the Taliban were shooting down Russian battle gears, US cheers and finally approved USD100m for re-construction… Now the Russian must really be smiling when Obama is asking USD200b to stay there and fight a war.. the current running cost is staggering to what they once lost, and is probably good for more round of Vodka free on the house… Didn’t we elect this guy to stop wars.. not extend the bleeding

Posted by William | Report as abusive

I don’t understand a particular comment I continually see on these boards…”Obama did ‘inherit’ deficit…but it was the Congress, both Dems and Repubs that brought that about. Why on earth would anyone spend time blaming the past when Obama is spending money like we have it? Why is he getting a pass on this from his own party? Don’t you want to keep your disposable dollars like me? Be part of the solution for pity sake, not part of the ongoing crisis!!

Posted by Marie | Report as abusive

NOW you talk about the interest on the debt?
No. Now we talk about the Barney Franks Depression. Now we talk about the market crashing as soon as it became obvious that Barry was going to be elected. Now we talk about the loss to our children and grandchildrren caused by this madness. Intrest is so far down our list that it may never be talked about.

Posted by jaba | Report as abusive

Unfortunately, all that interest money is being paid to the European jewish bankers (Banksters) who still own, and have always owned, The Federal Reserve. You should investigate how the Fed came into existence and who actually owns and runs it, if you want a REAL shock!

Posted by ronski | Report as abusive

NOW you talk about the interest on the debt? Democrats yelled about it every year from Reagan onwards, and Clinton was the only one to NOT increase it substantially, and Bush Jr. more than doubled it, but now that Obama’s inherited it, the debt is a big deal to you. Thanks for waking up.

- Posted by Steverino

Yes you are correct. So basically you are saying the Dems are no better, and if anything quite possibly worse. Of course Clinton approved and signed the act to repeal Glass Steagal. Regardless none of this is an excuse to make matters worse. So much for change you can believe in.

Posted by Bart | Report as abusive

Steverino. Clinton had no “real” surplus. It was all smoke and mirrors. So, just keep that in mind.

But even more serious. Everyone knows what Obama is doing is wrong and there was a very strong push by Americans to stop the spending plan from passing congress. The calls and letters were clogging up the congressional mailboxes, email and telephone switchboards. Only 37 percent of Americans supported this plan. However, no one listened and it was passed anyway.

Just look at all the posts here related to this story, everyone knows it is wrong, but we are being led down a very scary path which will lead to our demise.

It is clear the people who voted for Obama and the liberal democrats in congress are beginning to see they made a huge mistake. Obama’s poll numbers are worse than Bush’s were in 2000 after a month in office (63 percent to 59 percent).

With the grace of God, Obama and the liberals in congress for one term and out, starting in 2010. We need divided government because what we have now doesn’t work.

Posted by TC | Report as abusive

the posts are showing that there is concern about obama,s first weeks in office.he is doing what he said he would do,i am confused that people did not see that his back ground was socialist.if it looks like a duck,and quakes like a duck the chances are, it is a duck.for obama to rise up the ranks in chicago with the far left radicals in the chicago democratic party,he had to be one of them,to suggest other wise is not worth a comment.the distribution of wealth which is tax hikes for the rich is always a high priority on their agenda,

Posted by brian lee | Report as abusive

After the democrats and Obama are done with their economic solutions, we will soon all have monopoly money. I thought they have new positive ideas for the people. It all looks destructive for everybody. The new leadership of the government seems too eager to be “Robin Hood” no matter what. I expected more from this bright young man Obama. I am greatly disappointed in his actions. I am now starting to believe the far right that he is an anarchist and hates America just like his pastor did.

Posted by Teresa | Report as abusive

Wow that Ellis guy is a real partisan sheeple! And as most of them are, not too bright either; he “claims” to have laid off the Obama supporters. Provided he actually has a job, and has the authority to lay people off that would be illegal. Which is why I’m pretty sure he’s not just a partisan, but a liar.

DUHbya owns the highest debt ever in America’s history. Watching the Reds for the last 2 weeks desperately run from what their party has done IS A HOOT!

Make some popcorn, sit back and watch the show! But oh god not the Jindal show – that was painful.

Posted by L. Siller | Report as abusive

To all you Obama voters & supporters: thanks one hell of a lot.

Posted by Anne | Report as abusive

So Silly , just another get mad article . We spend over 1 trillion on the military , ohhhhhh
don’t mention that !!! 40,000 men sit on butt in south korea getting paid . GWbush new boat is as long as the empire state building – want to see the gas bill !!!! we have 725 military bases around the world and are in roughly 125 conflicts. and they are not here.
Bush gave money away like an idiot and now we have millions of people after 8 years of putting their heads in the “football TV” that are just waking up. Yes we still have to be at war for the moment, it will end . Yes many crooks of the last 8 years are going to go to jail.Stevens, Frist( for insider trading ) But its been a month – and because of a lack of caring by a now fairly uneducated group of americans , nobody policed the banks because people voted on religion. Well next time pay attention , if we get a next time.

Posted by john martin | Report as abusive

The biggest problem Americans have is their gross ignorance of the role the country plays in the world, and how much the military-industrial complex sets the agenda. Obama’s greatest failing so far has been to just carry on as Bush did. But then, what is he supposed to do? Until the population has a full grasp of how foreign policy is set and that the US is stuck as the world’s hegemon, nothing significant will change.

A radical departure – say closing down the 750 plus US bases around the world and letting big banks go down – would draw the wrath of Republicans on an enormous scale.

Posted by Bob Macdonald | Report as abusive

Well, I think that all past Presidents and Congress has built the economy into what it is today. A new leader that is chosen by the people should not get the business from taxpayers who has been silent on past economies.

No one in American knows when the economy fell, and no one in the U. S Government really cared about economy until an African-American took the oval office.

As long as the white society has a white leader spending it’s not a problem but when white America thinks its minority sector is going to be equal to white society
panik sets in to U. S. society.

Posted by Roderick Gardner Sr. | Report as abusive

Do not care to much the debt. It is easy to nulify any monetary debt just by printing more, – 50% a year inflation can do it to US debt in 8 years of Obama presidency… that is why the gold price is on top – those who want to control their money value have no big fate in dollar those days.
After the nulification of the debt – inflation will be stopped by introduction of “New $ ” – arazing three zeros … it was made easily in israel in end of 1980ies – the tresure arazed 3 zeros…

Posted by ben | Report as abusive

To Anne –

You’re welcome!! :)

from the majority of Americans who ELECTED Obama (in the biggest landslide since the 1980′s AND wasn’t stolen). This is a true mandate from the people.

Posted by Susan | Report as abusive

Hey Steverino:

The budgets Obama is submitting, and the ensuing budget deficits, will add more to the national debt in his first 2 years in office than Bush did in 8.

It’s time for you lefties to stop talking about the “Bush deficits”. The election is over and it’s now plain that Bush was Obama-Light as far as budget deficits go. You people who thought Obama was going to bring “fiscal responsibility” to Washington are looking pretty foolish.

And don’t tell me it’s because of what Obama inherited. There’s massive spending in his budgets that don’t have anything to do with Bush and everything to do with a big government, liberal agenda. National healthcare anyone?

Posted by turbo | Report as abusive

l siller, another poster being accused of not been smart, because we criticize obaman,s policies. what i read is that ellis is like me, a small business owner,the people who create jobs.what are you smartie,a unionized teacher, of do you work for the city ?we are the ones who will pull this country out of this mess,the method? it is called enterprise.

Posted by bian lee | Report as abusive

let us be reminded of when/how the national debt got the way it did. The national debt was relatively small until Reagan/Bush 1. Clinton raised it but at a slower clip and started to bring it down. Bush 2 added nearly $4T to it. Between Reagan and the Bush’s, they added almost $10T dollars (see whitehouse.gov budget office to confirm). While I agree with the GOP on it being unfair for 20% of the population providing 70% of the revenue to run the federal gov, you can’t help but see the hypocrisy when it comes to fiscal discipline…from both parties.

Obama right now is going to add another $2-4T to the national debt. Although I think it is important to modernize elements of our infrastructure and the way we operate, we need a plan for paying the national debt, not just interest on it. that’s like us as individuals continuing to rack up credit card balances, pay interest only, and never pay principle, when the heck do you expect to be out of debt? never….we need a plan to pay the national debt and a better tax system that makes the bottom 75% pull their weight and help pay to run the US. We as a people our a reflection of the government and vice versa. Both the government and the people of this country have tacked on debt like crazy for decades. The government should provide the example in this case so that people can be a reflection of the government’s fiscal responsibility. No one is going to see the value when we see that our own representatives are irresponsible and can seemingly take on endless debt.

As far as the current deficit, I don’t see another way to tackle the problem. Government spending is the last resort in situations like this. Japan learned that the hard way. They tried little things here and there but ultimately it was the government that had to pick up the slack while banks cleaned their books. Once the banks get their stuff together the fed can clean it’s books. Letting this collapse and rebuild is not an option. It may take decades to recover with that approach. With that approach, the top 20% would be ask to shoulder even more of the burden and it will cost them even more in the end. leaving the bottom 80% out to dry w/o healthcare, medicare, and other social services will end up coming out of our pocket anyway, might as well attempt to control how we spend it. it sucks, but until we have a better system of paying for the government the top 20% will continue to be the “beasts of burden”. We need a “fairer” tax system, the current one sucks.

Posted by RM | Report as abusive

[...] Front Row Washington » Blog Archive » Think the U.S. deficit is bad? Check out the interest paymen… – [I love how this article keeps referring to the Obama budget, as if our debt didn't come from all those Bush budgets of yesterminute. --Lee.] [...]