Here's a new way to think about the U.S. government's epic borrowing problem: by as early as 2015, the estimated interest due on US government outstanding debt will be $533 billion - which is equal to a third of the annual federal income tax revenue expected to be paid that year.
Fortunately or looking on the bright side, the record levels of debt issued in the past few years have paid for stimulus and other rescue programs that prevented the economy from falling off a cliff; and the money was issued at very low interest rates. But low interest rates won't be around forever.
As interest rates rise and the economy improves, the private sector borrowers will likely return to the debt market and compete with the US government for capital. At that point, the country's interest payments could increase dramatically.
The Congressional Budget Office, which makes the debt and interest payment forecasts, already baked some increase in rates into the numbers. Of course, there is always a chance those estimates may prove too conservative.
Below is a table showing our outstanding gross debt and the percentage of GDP the debt represents (in billions of dollars). It is projected to be over $14 trillion at the end of this year and represent 94% of our GDP.
2000 5,628.7 58.0
2001 5,769.9 57.4
2002 6,198.4 59.7
2003 6,760.0 62.6
2004 7,354.7 63.9
2005 7,905.3 64.6
2006 8,451.4 65.0
2007 8,950.7 65.6
2008 9,985.8 70.2
2009 12,311.4 86.1
Below is a link to the Treasury's website which posts the monthly as well as annual interest payments on the debt. Click on the link to be taken to the website.
http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm
