Interest Costs Poised to Surpass Defense and Nondefense Discretionary Spending

http://blogs.wsj.com/economics/2015/02/03/the-legacy-of-debt-interest-costs-poised-to-surpass-defense-and-nondefense-discretionary-spending/?mod=WSJ_hpp_MIDDLENexttoWhatsNewsForth

by spking • 11 years ago

17 14 11 years ago

blogs.wsj.com

msandford6• 11 years ago

We've let the politicians mortgage our future for our present. It was bound to catch up with us eventually. Perhaps this will encourage those in Washington to figure out how to save money lest they all find themselves out of work.

nbaman_23• 11 years ago

Interesting way to put it. However, I doubt it. As long as the printers don't run out of ink, this will continue...

dragonwriter4• 11 years ago

It was bound to catch up with us eventually.

"Catch up" and lead to a situation where even the higher of the estimates has interest payments at a level that "Most economists and budget experts would agree [...] are manageable for an economy"?

Not seeing the problem.

msandford6• 11 years ago

If you believe economists and budget experts then you're absolutely right, there is no problem. But economists as a whole do no (or a tiny margin) better than chance at predicting a lot of things. So I'm not sure that their confidence that everything will be OK is terribly reassuring.

http://www.automaticfinances.com/monkey-stock-picking/

http://www.theguardian.com/science/2012/jul/08/this-much-i-k...

http://www.newyorker.com/magazine/2005/12/05/everybodys-an-e...

If I build bridge after bridge and they all fall down at some point you're going to have to wonder if my engineering degree is worth even the paper it's printed on.

An expert whose expertise is little better than chance can't really be called an expert, no matter how impeccable their credentials or how long their career.

Hermel• 11 years ago

I doubt the assumption of government bond yields raising back to 10%. I would rather bet on a scenario with ongoing low interest rates.

joe_the_user• 11 years ago

Thanks for pin-pointing the problem.

In this instanced, "poised" means "may happen in ten years if my pet theory comes true".

Another crank article, essentially.

bradleyjg• 11 years ago

I can't tell from the article whether the interest payments referred to includes intra-governmental debt (including on holdings of the federal reserve).

In any event if the White House believes that interest rates are set to rise, and given that 30 year bonds are currently yielding 2.63%, it seems like now would be a good time to increase the amount of long term debt issued (see http://ftalphaville.ft.com/files/2014/10/US-debt-issuance-ma...) and perhaps issue even longer term debt. Japan sells a 40 year bond, Canada, France, and the UK have each recently issued 50 year bonds.

Interest Costs Poised to Surpass Defense and Nondefense Discretionary Spending

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