On Aug. 31, Chris Daley wrote a column about the national debt. It is difficult to determine his main point or points. Is it that we could have avoided the current debt or that it will continue to rise under Romney?
Most people’s concern about the debt is the burden it will place on our “grandkids.” Neither political party expresses a concern about the burden on ourselves, i.e., the drag on our current Federal budget. The cost of “debt servicing,” that is, the interest paid on the borrowed funds, is never mentioned.
This amount varies with the interest rate but is now in the neighborhood of $400 billion. If we borrow $1.2 trillion per year about one-third of this amount is borrowed just to pay the accrued interest. Currently our debt is $16 trillion and is projected to grow by $5 trillion in the next four years under the current economy. If so, interest payments will increase by about one-third.
Will a family or country which takes on more debt to pay off interest on an increasing debt long survive?