Fastest Growing Contributor to National Debt is…Interest on National Debt
Entitlement programs are indeed huge contributors to the U.S. government’s national debt. But worries about them could become eclipsed by the interest on the debt itself in future years.
Ballooning interest payments could be so bad that they would wipe out the $1.2 trillion in savings from the sequestration budget cuts over the next decade.
Congress is “currently trying to reduce deficits over by about $4 trillion in roughly that time frame, too. If interest rates returned to 1980s levels, CBO says deficits would swell by $6.2 trillion instead,” Niraj Choksh wrote for National Journal.
Currently the largest holder of the national debt is the Social Security Trust Fund at 16.7%. The Federal Reserve owns about 8%, while more than 30% is held by American institutions and individuals.
To Learn More:
There’s Nothing to Fear But the Debt Itself (by Niraj Choksh, National Journal)
A Citizen's Guide to the Fiscal Year 2012 Financial Report of the United States Government (Financial Management Service)
Fiscal Year 2012 Financial Report of the United States Government (Financial Management Service) (pdf)
Most of U.S. Debt is Owed to…Americans (by Noel Brinkerhoff, AllGov)
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