The Federal Reserve has continued to raise interest rates in their attempt to slow down the economy by tightening the monetary supply for the sole purpose of reducing inflation. The FED and the new Republican Congress has saved the Democrats and President Biden from themselves by getting the nearly double digit inflation down to 4.6% today.
But because of Washington’s continued reckless spending habits, the FED can only do so much to curb inflation. By 2028, the projected interest payments on the national debt will now cost more than we spend on defense spending AND non-defense discretionary spending. According to estimates, by 2046 the interest payments will exceed all that we spend on Medicare and by 2051 the interest spending will account for more than all of the Social Security program, which is the largest mandatory federal spending taking place.
If we compare the national debt to a single American’s credit card, if the underlying principal balance isn’t paid off then the interest increases and increases and becomes incredibly hard to pay off. American’s want to pay off their credit cards as it is the smart thing to do and not just spend their hard earned money on interest. What the government is doing is continuing to run up the credit card bill, never paying off the balance and simply paying the interest at a skyrocketing rate. Putting this in terms of what everyday American’s spend on bills, it would be like having your groceries, gasoline and mortgage costs has only the interest payment on your debt, this is why Washington must tighten the spending belt and get the debt under control.
These projections were created by the Congressional Budget Office, taking into account optimistic interest rates, yet we still see the interest payments on the national debt drastically outpacing any initiatives put forth by Congress.