News and Opinion: November 4, 2022. United States Pays 1.4 Trillion US$ a Year in Interest on its Debt

[marcusantoniu26]

The US National Debt is at about 31 trillion US$. With the recent increases in interest rates related to the "fight against inflation", the average interest the US debt pays is about 4.5%. This makes the yearly interest payments for the debt to be around 1.4 trillion US$. This represents close to 1/3 of the US federal income.

All this means is that the amount of debt is enormous and the only way to get out of it is to increase the GDP (therefore increasing federal income), and reducing the interest rates. Very difficult to achieve in an inflationary environment. An alternative is to use inflation as a hidden tax, but this will go in detriment of the quality of life of the people

For further information, read this article

This post is intended to only raise awareness. In order to make actual financial decisions please contact your financial advisor and/or tax advisor prior to making the decision.

Comments

[ikservices]

Countries with high debt will experience increased interest payments when interest rates increase

[secondmedicalop]

Increasing the federal income would be a way to reduce the percentage of income that is needed to service the debt