What Interest On U.S. Debt Would Buy

Fox Business November 27, 2009

November 24, 2009 01:24 PM EST by Elizabeth MacDonald

The New York Times ran with this front-page story this week:

"With the national debt now topping $12 trillion, the White House estimates that the government's tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher."

The problem: The Times understated the annual interest by more than $180 billion.

For fiscal year 2009 federal government paid $202 billion in interest on the public debt.

But that figure doesn't include interest paid on intragovernmental holdings, primarily composed of Treasury securities held by the Medicare trust fund and Social Security trust fund.

Total interest on the debt that includes intragovernmental holdings is $383.3 billion, says Fox News analyst James Farrell. That equates to the gross domestic product of Malaysia or Belgium.

Breakdown of Total Debt

Sources: Treasury Dept.; DOT Budget Climbs to $73.3 Billion for 2010; CBO Monthly Budget Reports; CBO'S Budget and Economic Outlook: An Update

What Interest on the Federal Debt Will Get You

The $380 billion total in interest paid annually on the federal debt is equal to the size of Norway's sovereign wealth fund, one of the largest in the world.

It's the amount estimated to be the value of all Internet content as of 2007, the latest data available from web reasearchers Outsell Inc. The $380 billion equals the amount the US government spent on its computers and data systems in fiscal 2005.

It's 49% more than the estimated cost for Japan's last stimulus package in December 2008, and it's what Nigeria has lost to theft and waste in the last 46 years.

The total $383 billion in interest on the federal debt would pay for slightly more than half of the Defense Department's budget ($674.7 billion in FY2008). It would pay for just shy of half the annual budgets of Treasury ($751.2 billion) and Health and Human Services ($721.7 billion).

The $383 billion would cover the budget for the Dept. of Energy about 15 times over, Farrell notes.

And how many government agency budgets could you pay for with $383 billion?

The $383 billion would pay for all on-budget costs for the following 18 government agencies (FY 2008), with about $12 billion in change left over, Farrell says. The total $383 billion would cover the combined budgets for Commerce, EPA, Homeland Security, Housing and Urban Development, and the budgets for the entire Judiciary and Legislative branches:

And $383 billion would cover all federal government expenditures on the following areas (with about $13 billion left over):

Sources: Office of Management & Budget, Mid-Session Review, Historical Tables, Budget of the U.S. Government, Fiscal Year 2010

So with these figures in mind, and knowing the US government won't balance the budget for the next ten years--ask yourself this: What foreign government would even want to buy our debt?

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I used to vote for the left, and not really wanting to believe how tax n spend they really do. Last night's State Dinner cost US a fortune. Rome is burning folks and we have elected officals playing the violin. I'm voting independant each race and not voting for president until we get an independant in there. BM3 McGehee USS Flint AE-32

These calaculations are based on very low interest rates, whcih are currently artifically low. When rates climb these numbers will rise very quickly. This will work just like the people who were caught in adjustble rate mortgages, as much of debt is financed over short periods of time. I amgine if rates returned to Carter era.... The interest on debt is now four times the 1981 budget deficit.

This is a government running amok, whose sole purpose is remaining in office no matter what happens to the country. If we don't act now and remove ALL from Congress, Republicans and Democrats alike, I predict we will see the bankruptcy of the United States within two years. This can't go on ad infinitum, soon we'll have to pay the piper( China?) Semper Fi

YOU CAN START FIXING THIS BY ENDING THE FEDERAL RESERVE SYSTEM. THE OWNERS OF THE FEDERAL RESERVE CAUSED ALL THIS ECONOMIC CHAOS, SO LETS JUST END THE FEDERAL RESERVE SYSTEM. IT IS A DEBT SLAVERY SYSTEM

Liz, That interest would cover 4,145,395 jobs. I divided the interest by GDP ($14.266 tln). I got a rate of 2.7%. Then I multiplied it by the labor force of 154,287,000 and got the employment number. Subtracting 10.2% from the 2.7% and we get a 7.5% rate which we were promised from the stimulus which would have covered two years of interest. Liz, you and your family have a happy Thanksgiving. BobH

The answer is no-one,period! What is sad,..is having to raise interest rates to entice buyers of our faux-paperchase greenback. Unfortunately,.inflation will rear it's ugly head putting us further in debt. I'll use this example; recently our country leaders literally paid-off a senator from Louisiana to the tune of $100mn to vote in favor of the "HealthCare Bill"! We are now,the finished product of a once vibrant passe democracy. Only a few straws are left to break the camel's back! Thanks E'Mac

The interest "paid" on the intragovernmental holdings are just more of the same "special obligation" bonds, meaning it's just more debt that they will tax us out of in the future. Why not just delete all of these bonds and start over with some honest accounting? Oh, I forgot who we are dealing with, forget it.

How many jobs would have been "created or saved" annually with $383 billion if we weren't buried in debt? How about 7,660,000 jobs with an annual salary of $45,000 plus all taxes! Way to go, federal government. Bury us alive.

How many jobs would have been "created or saved" annually if we weren't buried in debt? How about 7,660,000 jobs with an annual salary of $45,000 plus all taxes! Way to go, federal government. Bury us alive.

What Interest On U.S. Debt Would Buy

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