Monday, January 17, 2011

The Federal Debt - The Ugly Truth

Here is an opinion piece on the United States' growing federal debt (sum of all annual deficits). It's not a pretty picture and unfortunately it seems that both Democrats and Republicans are unwilling to actually address the deficit.

As the debt continues to grow two things will make it easier to repay, higher growth in our country and a little bit of inflation. Inflation erodes the value of past debt. Unfortunately, we still need people willing to buy government bonds and unfortunately this is going to come at a cost. The U.S. already spends nearly $500 billion on annual interest rates payments servicing the debt. By some projections this could reach nearly $1 trillion by 2020 (or $3,333 per person per year).

It's not a pretty picture.

1 comment:

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