February 8 2013
Carrie L. Lukas
What would you say to a friend—or someone who ran a business or any organization, for that matter—if they told you that their financing costs were set to nearly quadruple over the next ten years?
You’d tell them they have to get their act together, right? They need to make changes to their finances today to arrest the situation and start paying down the principle rather than continuing to rack up more debt, so that they avoid what is clearly a destructive financial death spiral.
That should be the main take away message from the CBO’s latest report. As Emily described, there is a lot of information in there about our none-too-rosy financial outlook, but this should be the real shocker. As Politico explains:
Behind the fine print of new budget estimates released Tuesday is a growing — some say brutal — competition between discretionary spending by Congress and fixed interest payments owed on the growing government debt.
Indeed, the steady increase in annual interest costs is a surprisingly big reason why the Congressional Budget Office sees deficits rising in the second half of the coming decade.
…In 2013, CBO estimates that discretionary outlays will total $1.2 trillion vs. $224 billion for interest: a better than 5-1 ratio. By 2023, discretionary outlays will be $1.42 trillion, according to CBO, while interest payments will have risen to $857 billion.
If this was a report on any other country, US politicians would be sanctimoniously making speeches on the need for them to take immediate action. If this was a corporation or a Wall Street firm, the media would be aghast at near criminal levels of malfeasance.
Where’s the outrage with Washington?