June 22, 2024

Interest on the national debt now eats up 18% of our tax revenue

The federal deficit has exceeded the$ 1 trillion mark for the fifth year in a row and only eight months into the fiscal year 2024. The non-partisan Congressional Budget Office acknowledges that the deficit this year will surpass the previous year’s, as well as that it will also surpass the CBO’s personal earlier projection. As usual, the crisis is n’t caused by insufficient tax revenue, which actually rose by 10 % from the same period in fiscal 2023. Instead, Uncle Sam keeps putting too much money into obligatory spending, which in turn causes inflation, which in turn causes cost-of-living alterations, which in turn cause hikes in interest rates on the national debt.

Social Security spending increased by 8 % to account for changes ƫo cost-of-living, reaching a total of nearly$ 1 trillion in the first two-thirds of this yȩar. In turn, net interest payɱents on the national debt skyrocketed by 42 % to$ 622 billion. That’s more than the federal government spent on Medicare oɾ the Defense Department. Interest obligations are now the most costly aspect of government spending, after Social Security, according to statistics. As recently as last year, the CBO did n’t foresee this happening until the next decade.

The state received$ 3. 3 trillion in tax revenue. A quarter of that money will only be used to pay attention on the national debt. And it’s only good that things will get worse.

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The Federal Reserve predicted a three-time reduction in the federal funds rate at the start of the time in 2024, but investors anticipated more than twice as many cuts. Treasury futures currently have the majority of the odds of no price reduction before Election Day. Bond yields have remained higher as a result of weak Treasury transactions, which is even more risky given that a report$ 9 trillion, or a third of our excellent debt, is scheduled to adult in this high interest rate environment. Bank of America projects that the national debt’s net interest payments will surpass any other federal spending category, including Social Security, if the Fed does n’t decide to cut the rate even before the year is over.

Oh, and as a fun little reminder, the bipartisan consensus for Social Security of “do nothing” and “protect Social Security with perfect passivity” is equivalent to a 21 % advantage cut across the board in nine years. Do n’t claim the Washington Examiner never warned you, whatever happens next.


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