Saturday, June 23, 2012

Since 2005, Interest Payments On Federal Debt Have Consumed 91% Of GDP Gains

YEAR GDP INTEREST (billions of dollars)
2005  770  352
2006  754  406
2007  651  430
2008  263  451
2009 (352) 383
2010  587  414
2011  568  454
2012  360  408 (estimates)

GDP gains for the eight years come to approximately $3.6 trillion. Interest on the debt for the same years comes to approximately $3.3 trillion.

We are barely treading water. This is why the Fed is obsessed with interest rates. Any uptick in interest rates without an uptick in growth and the sheer size of the debt to be serviced will crush us.