• The Peterson Foundation recently released a report which indicates that the US government will pay $660 billion in interest on its national debt this year.
• This increase is largely attributed to the Federal Reserve’s 10 consecutive rate hikes over the past year, with a benchmark interest rate of 5.08%.
• The US government’s gross national debt is projected to reach almost $52 trillion within 10 years.
Rising Interest Rates Will Cost US Government Billions
The Peterson Foundation, a nonprofit created by billionaire Peter G. Peterson, has reported that rising interest rates will push the US government’s interest payments to over half a trillion dollars this year. According to their research, federal outlays for 2019 are estimated at $6.4 trillion – an increase of $81 billion from 2018 due in large part to aggressive rate hikes by the Federal Reserve.
Federal Reserve Increases Benchmark Interest Rate
In response to inflationary pressure, the Fed has implemented 10 consecutive rate hikes in 14 months, driving its benchmark interest rate up to 5.08%, a level not seen since 2007. These increases have had a dramatic effect on total payments made by the US government; it is predicted that this figure will rise by an additional $187 billion solely for interest owed on debt held by public entities.
US Gross National Debt Projected To Reach $52 Trillion By 2033
At present, the US government’s national debt stands at over $32.17 trillion and is expected to steadily climb over time; analysts estimate that it could reach as high as almost $52 trillion within 10 years if current trends continue unchecked.
Impact On American Taxpayers
The consequences of such massive debts are far-reaching and can be felt acutely by taxpayers across America – particularly those with lower incomes who may face higher taxes or cuts in public services or social security benefits as governments scramble for ways to cover these costs without drastically increasing deficits even further down the line.
In conclusion, irresponsible spending combined with an ongoing cycle of increasing interest rates could cause major economic hardship for Americans and lead to crippling levels of national debt if left unchecked in coming years – something policymakers must work together proactively address before it reaches critical mass and becomes too difficult or expensive to reverse course on quickly enough without damaging effects on future generations of citizens worldwide.