"Interest Paid On The National Debt?"

"Interest Paid On The National Debt?"

by Dan Denning

"How much of your income taxes are being spent on interest on the national debt? According to the latest Monthly Statement of the US Treasury, Net Interest expense was $81 billion June of 2024. That’s 43% of the $185 billion the government generated through income tax receipts. But wait!

If you look at the bottom of the table below, you’ll see that ‘gross interest’ paid in June was $140 billion. That’s 76% of total income tax receipts. Three quarters of every dollar you paid in income tax went to pay interest on the debt in June. How sustainable is that?

Click image for larger size.

‘Net interest’ is the interest paid to US Treasury debt held by the public. ‘Gross interest - a much bigger number -  includes interest paid to various US government trust funds (Social Security) and other intra-government holders of US debt. In other words, its money the government ‘pays itself.’

Total US government debt is less than $50 billion away from $35 trillion. As the debt climbs closer to the 130% of GDP ‘trigger point’ we’ve identified in our research, the question arises: Who will the US government choose to default to first? Or will it default to all debt holders, through higher inflation (and interest rate cuts, beginning next week from the Federal Reserve)?"

- https://www.bonnerprivateresearch.com