11-30-2004, 11:43 AM
Your math looks alright. Taking a look at some budget abstracts, I come to similar conclusions. Roughly 3T is listed as being borrowed from government accounts (~2T of which comes from the social security and medicare accounts), so the "net interest" is actually only about 1.5% of GDP. I think we are a long ways from a financial nuclear meltdown.
However, it does take a toll. If we include the interest that is due to those federal accounts, the estimated interest payments for this year are listed at 242 billion (about 2.2% of GDP actually, then?). Total receipts are estimated at 1.8 trillion. So, we are talking about over 13% of all taxes paid wasted on interest. Of course, since we spend more and borrow more, the implications of this are not clear.
However, it does take a toll. If we include the interest that is due to those federal accounts, the estimated interest payments for this year are listed at 242 billion (about 2.2% of GDP actually, then?). Total receipts are estimated at 1.8 trillion. So, we are talking about over 13% of all taxes paid wasted on interest. Of course, since we spend more and borrow more, the implications of this are not clear.