OPINION - Editorial

Of interest to all

Debt payments to skyrocket

WHAT'S CAUSING the mood swings on Wall Street? We are happy and gratified to be able to answer that question: We don't know. (Twain, M.)

But the question probably has multiple answers. The president tweets something insulting about the Fed chairman, stocks go down. Reports that retailers had the best Christmas in years, stocks go up. The president tweets the firing of another Cabinet official, stocks go down. Amazon issues its latest news release, stocks go up. Somebody said the other day that the president could do wonders for the economy if he just gave his thumbs a rest. No argument here.

But could it be that the folks on Wall Street, the folks investing in the American economy at what was famously called the last bastion of pure capitalism left on the Earth, think long-term? Sure, they're not above "taking profits" after a big rally (see Thursday), but maybe some investors are taking the long view. And if you're going to look at the American economy beyond next quarter's profit estimates, you have to look at the national debt.

Anybody banking on the future would sell, sell, sell at this rate.

As the Fed begins raising interest rates, as it always does when the economy improves considerably, the interest payments on the $21 trillion debt will also increase. Several published reports say that interest payments could nearly triple in the next decade.

Triple.

The Congressional Budget Office, for its part, says the American government--that's all of us--will pay $315 billion in interest on the national debt this fiscal year. But by 2028, it will likely rise to $914 billion. And over those years, the total paid out in interest will probably reach nearly $7 trillion. With a T.

Each year, we would be paying more for the interest on our debt than we pay to the Pentagon for the military.

We would be paying more for the interest on our debt than we pay for Medicaid.

We would be paying more for the interest on our debt than we pay for agriculture, veterans and education--combined.

Imagine what could be done with $7 trillion over 10 years. Or just imagine what can be done with $900 billion in one year:

Governments at all levels spent only $165 billion on highways in 2014. Food stamps cost a total of $71 billion in 2016. The last aircraft carrier, the USS Gerald Ford, cost almost $13 billion to put asea. The highest price we've found for a brand-new nuclear power plant is right around $9 billion.

If we paid no interest on the debt, we could double highway funding, double SNAP benefits to the least among these, put another 10 aircraft carriers out to sea, and build 50 more clean energy nuclear plants around the country, and still have plenty left over for the president's wall.

But as anybody carrying a load of debt will tell you, you can't buy a pretty new truck and add on to the house when a large portion of your paycheck goes to credit card interest payments.

In the long run ... . Well, as somebody once noted, in the long run we'll all be dead. That's true enough. But the debt--and the interest on it--will be alive for our children and grandchildren to pay. And it will keep them from spending tax dollars elsewhere on more worthy projects.

The root cause of many a personal financial crisis is likely that person living beyond his means. And this applies not only to people, but nations.

Editorial on 12/28/2018

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