The United States government has just reached a dubious and disturbing financial benchmark that will hurt already suffering families: more money is now being spent on just the interest payments on the almost $35 trillion national debt than on national defense or Medicare.
This also means every man, woman, and child in America owes $103,207 each to pay it off.
The Treasury Department said that for the first time in the history of the United States, interest payments on the national debt were $514 billion and have exceeded every other individual budget item except Social Security.
Federal spending rose by $162 billion last year just to cover interest on the nation’s debt.
The United States debt to GDP ratio is at an alarming 122% compared to 58% in 2000 and 35% in 1980.
The Committee for a Responsible Budget estimates that 39 cents of every dollar paid in personal income taxes goes to pay down the interest on the national debt.
The Government Accountability Office (GAO) said that federal spending looks to be unsustainable long into the future stating in a recent report that, "The federal government faces an unsustainable long-term fiscal path” if spending continues to rise.
Coupled with a ballooning national debt, stubborn inflation persists for another month. New inflation numbers were also released for the month of April, showing continued problems for the national economy and continued high prices for everyday Americans.
With the Consumer Price Index (CPI) also still stubbornly high at 3.4%, and Producer Price Index (PPI) up 2.4%, there is little chance of a reduction in interest rates from the Fed anytime soon.
Inflation is still running well above the Federal Reserve’s 2% target and when inflation is above 2% the Federal Reserve can consider it threatening to the United States economy.
Chris Larkin, managing director of trading and investing at E*Trade said in an interview with CNN, "In late 2023, some investors thought the Fed would start lowering interest rates in March, and get six or seven cuts in by the end of this year. More hot inflation data could make the debate about whether 2024 will contain even a single cut.”
For the taxpayer, this means continued high prices for daily items and no end in sight to high interest rates for home mortgages and car loans.