PrintJune 21, 2010
Endless Zeros
Twenty trillion dollars. That is the estimate of federal indebtedness by 2020. But that $20 trillion is just the federal debt: it does not include $3.4 trillion in current annual spending, nor does it include state and local obligations.Government has no intention of paying off this debt -- only of continuing to add to it. What that means is that taxpayers are obligated to service this debt (and whatever is added to it) at prevailing interest rates forever. Those rates could range from 3% on up -- to whatever rate the bond market assigns. Generally speaking, the more debt a nation incurs, the higher the rate over time. At 3%, the annual cost of servicing a $20-trillion debt is $6,000 per taxpayer (assuming that half of all Americans pay no federal taxes), or $12,000 per middle class couple. This amount is in addition to whatever Congress appropriates each year. By 2020, the annual appropriation (currently at $3.4 trillion) may well reach $5 trillion, which is $50,000 per taxpayer....(Read Full Article)
