Unimaginable US debt and debt service | LVS, Gaming, & Transocean Forum

Blitz
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Unimaginable US debt and debt service Jan 18, 2024 8:09:24 GMT -5

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Post by Blitz on Jan 18, 2024 8:09:24 GMT -5

The Eye-Popping Interest Payment Spike On Our National Debt

Combined net worth of nation's most prominent billionaires wouldn't cover a single year's interest payment, analysis shows

By Spencer Lindquist • Jan 17, 2024 - DailyWire.com •
www.dailywire.com/news/the-eye-popping-interest-payment-spike-on-our-national-debt

Getty Images: Jonathan Newton | Erin Clark

The combined net worth of the most prominent billionaires in the United States would not be enough to pay a single year’s interest payment on America’s ballooning national debt, which currently stands at an astonishing $34 trillion.

The combined net worth of some of America’s most prominent billionaires, Elon Musk, Jeff Bezos, Mark Zuckerberg, Bill Gates, Ken Griffin, Mark Cuban, Ray Dalio, and George Soros, adds up to approximately $726 billion according to data compiled by the Bloomberg Billionaires Index. Meanwhile, the net interest on our national debt is currently at $730.8 billion, dwarfing the sum for previous years.

Interest payments on the United State’s national debt have risen sharply in recent years and remain on track to continue increasing. Net interest payments on the national debt hit a whopping $659 billion in fiscal year 2023, marking a massive 39% jump from 2022, when the government paid $475 billion in interest on the national debt.

The comparison signifies that increased taxation suggested by Democrats isn’t a viable path towards erasing the national debt, especially as interest payments pile up. The United States collected $4.4 trillion in federal taxes in fiscal year 2023, up from $4.19 trillion in fiscal year 2022, yet the debt increased by more than $2 trillion.

The debt interest payments continued to spike in October 2023, the first month of fiscal year 2024, when the government paid $76 billion on the national debt interest. The figure marked a shocking 77% increase from October 2022 when the government paid $43 billion on the interest.

Interest payments on the national debt are poised to reach an astonishing $1.4 trillion in just under a decade in fiscal year 2033, surging even higher to a projected $5.4 trillion in fiscal year 2053.

The projected growth does not just mark an increase in raw numbers, but also an increase relative to the size of the American economy. While the payments in fiscal year 2022 accounted for 1.9% of the United States gross domestic product (GDP), they are projected to account for 3.2% and 6.7% of GDP in 2030 and 2053 respectively.

The national debt itself is also set to reach new highs in coming years, currently on a trajectory to reach over $46 trillion by 2028 at a ratio of over $300,000 in debt for every American taxpayer.

Last Edit: Jan 18, 2024 8:10:02 GMT -5 by Blitz

Blitz
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Posts: 32,343

Unimaginable US debt and debt service Jan 19, 2024 9:16:57 GMT -5

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Post by Blitz on Jan 19, 2024 9:16:57 GMT -5

While he's at it... Maybe Biden could just cancel all US debt too.

And now this...

Biden Cancels $5 Billion in Student Debt in Latest Relief Step

Akayla Gardner - Fri, January 19, 2024
finance.yahoo.com/news/biden-cancels-5-billion-student-100000737.html?.tsrc=fin-notif

(Bloomberg) -- President Joe Biden is forgiving nearly $5 billion in additional student debt as the administration seeks to deliver on one of his signature initiatives with high stakes for his 2024 reelection campaign.

Almost 74,000 student loan borrowers will see debt canceled as a result of administrative changes by the US Education Department in the latest round of relief. Those affected include borrowers enrolled in the government’s income-driven repayment and public-service loan forgiveness programs.

Each program requires at least a decade of payment or service to be eligible for relief. Mismanaged federal student-loan plans have left some borrowers without promised relief after making payments for as long as 25 years.

“My administration is able to deliver relief to these borrowers – and millions more – because of fixes we made to broken student loan programs that were preventing borrowers from getting relief they were entitled to under the law,” Biden said in a statement Friday.

Of those receiving assistance, 43,900 borrowers are public servants and 29,700 are enrolled in income-driven repayment plans.

The effort comes as Biden faces pressure from civil rights group, labor unions and advocates for borrowers to expand the scope of a new student debt relief plan after the president’s earlier $400 billion initiative was struck down by the US Supreme Court.

The replacement plan is slated to be much narrower than that original plan that would have forgiven as much as $20,000 in student loans for an estimated 40 million Americans.

Read More: Civil Rights, Labor Groups Push Biden on Student Debt Relief

Nearly 70 groups, including the AFL-CIO and NAACP, asked Education Secretary Miguel Cardona in a letter Thursday to hold another session in the rulemaking process and to include targeted relief for borrowers who have experienced hardship.

The goal is to allow more young people, people of color and low-income borrowers to be eligible for relief.

Polls show Biden’s support has weakened among Black, Hispanic and young voters who will be crucial to helping him secure a second term.

Since the Supreme Court ruling, the administration has made amendments to existing federal programs to further provide relief.

The Education Department has incrementally unveiled $136 billion in student-debt cancellation for more than 3 million Americans, including for borrowers who were misled or defrauded by schools.

Last Edit: Jan 19, 2024 9:17:28 GMT -5 by Blitz

Blitz
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Posts: 32,343

Unimaginable US debt and debt service Feb 8, 2024 7:48:17 GMT -5

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Post by Blitz on Feb 8, 2024 7:48:17 GMT -5

The Budget and Economic Outlook: 2024 to 2034
February 7, 2024Report

www.cbo.gov/publication/59710

In CBO’s projections, federal budget deficits total $20 trillion over the 2025–2034 period and federal debt held by the public reaches 116 percent of GDP. Economic growth slows to 1.5 percent in 2024 and then continues at a moderate pace.

The Federal Budget

The deficit totals $1.6 trillion in fiscal year 2024, grows to $1.8 trillion in 2025, and then returns to $1.6 trillion by 2027. Thereafter, deficits steadily mount, reaching $2.6 trillion in 2034. Measured in relation to gross domestic product (GDP), the deficit amounts to 5.6 percent in 2024, grows to 6.1 percent in 2025, and then shrinks to 5.2 percent in 2027 and 2028. After 2028, deficits climb as a percentage of GDP, returning to 6.1 percent in 2034. Since the Great Depression, deficits have exceeded that level only during and shortly after World War II, the 2007–2009 financial crisis, and the coronavirus pandemic.

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Debt held by the public increases from 99 percent of GDP at the end of 2024 to 116 percent of GDP—the highest level ever recorded—by the end of 2034. After 2034, debt would continue to grow if current laws generally remained unchanged.

Outlays in 2024 amount to 23.1 percent of GDP and stay close to that level through 2028. After 2028, growth in spending on programs for elderly people and rising net interest costs drive up outlays, which reach 24.1 percent of GDP by 2034.

Revenues amount to 17.5 percent of GDP in 2024, decline to 17.1 percent in 2025, and then climb to 17.9 percent of GDP by 2027 after certain provisions of the 2017 tax act expire. Revenues remain near that level through 2034.

Changes in CBO’s Budget Projections Since May 2023

The deficit for 2024 is $0.1 trillion smaller than CBO projected in May 2023, and the cumulative deficit for the 2024–2033 period is $1.4 trillion (or 7 percent) smaller.

The biggest factor contributing to smaller projected deficits is a reduction in discretionary spending stemming from the Fiscal Responsibility Act and the Further Continuing Appropriations and Other Extensions Act, 2024.

The U.S. Economy

Economic growth slows in 2024 as unemployment increases, partly as a result of tight monetary policy. Real (inflation-adjusted) GDP growth accelerates in 2025 after the Federal Reserve responds to weaker economic conditions in 2024 by lowering interest rates.

Interest rates rose in 2023 as the federal funds rate increased to its highest level since 2001. In CBO’s projections, that rate begins to decline in the second quarter of calendar year 2024. Interest rates on 10-year Treasury notes rise in 2024 and then fall through 2026.

Inflation (as measured by the price index for personal consumption expenditures) slowed markedly in 2023. In CBO’s projections, it slows further in 2024—to a rate roughly in line with the Federal Reserve’s long-run goal of 2 percent—and then ticks up in 2025, before declining slightly.

Changes in CBO’s Economic Projections Since February 2023

Growth of real GDP is weaker through 2026, similar in 2027, and slightly stronger afterward.

Interest rates are generally higher. From 2024 to 2027, those higher rates mostly reflect the effects of stronger-than-expected economic growth in 2023. In later years, higher rates are driven by more capital income and less private saving.

The labor force is larger because net immigration, which began increasing in 2022, remains elevated through 2026.

CBO’s baseline budget and economic projections reflect the assumption that current laws governing taxes and spending will generally remain unchanged. Deficits and outlays have been adjusted to exclude the effects of shifts that occur in the timing of certain payments when the fiscal year begins on a weekend. Without those adjustments, the deficit projected for 2024 is $1.5 trillion (or 5.3 percent of GDP).

Last Edit: Feb 8, 2024 7:49:34 GMT -5 by Blitz