Part 5/8:
Currently, interest payments exceed expenditures for national defense and healthcare, becoming a significant part of government spending. With interest accounting for approximately 25% of all revenue, the US is at risk of entering a "debt trap," where more debt leads to higher interest that necessitates even more borrowing.
Historically, maintaining interest payments at around 3% of GDP is manageable; however, exceeding 4 to 5% starts to strain other essential spending like defense and infrastructure investment. Presently, the US interest expense hovers close to 4% of GDP, raising alarm bells for potential economic fallout similar to that experienced in countries like Argentina and Greece, where high debt service costs precipitated crises.