Pardon me, can you spare $2500 bucks for a cup of coffee - and interest on the debt?
Unless something is done about the gargantuan federal budget deficits, we'll be begging in the streets for coins to pay the interest on our debt.
The Obama budget plan shows a quadrupling over the next decade of interest paid on the debt. The Washington Post:
Interest payments on the national debt will quadruple in the next decade and every man, woman and child in the United States will be paying more than $2,500 a year to cover for the nation's past profligacy, according to figures in President Obama's new budget plan.
Starting in 2014, net interest payments will surpass the amount spent on education, transportation, energy and all other discretionary programs outside defense. In 2018, they will outstrip Medicare spending. Only the amounts spent on defense and Social Security would remain bigger under the president's plan.
The soaring bill for interest payments is one of the biggest obstacles to balancing the federal budget, pushing the White House and Congress to come up with cuts deeper than previously imagined. Unlike with discretionary spending or even entitlement programs, the line item for interest payments cannot be altered except through other budget cuts.
These are the numbers: Interest payments for FY 2011 on the debt - $207 billion. Interest payments for FY 2017 on the debt - $627 billion.
And these numbers assume that interest rates won't rise higher than the projections:
The explosion of interest payments comes from a double whammy of economic factors. First, the nation's debt is growing faster than the economy. Second, interest rates are rising. Over the next decade, net interest payments will amount to nearly 80 percent of the debt added, an indication of how past borrowing is forcing the country deeper into debt.
"We're running a gigantic deficit, and we're not growing very fast," said Kenneth Rogoff, an economics professor at Harvard University and former chief economist at the International Monetary Fund. "We're on a dramatically unsustainable path."
Since neither party has been willing to seriously address the deficit, I expect that a tipping point will come - and come faster than anyone can imagine right now.