US 'exposure to crisis $23.7tn

[TheRealMafoo]

NJ5 said:

Here is why the shit hits the fan:

If the US gov borrows that much, it will have to pay back the debt with interest. $24 trillion debt with, let's say, 4% interest (reasonable for treasury bonds) means paying almost a trillion dollars in interest every year.

The US federal budget in 2008 was around 3 trillion. So we're talking about a situation where around 33% of the budget will go to paying interest (not counting the already existing debt).

However, if borrowing goes that high, interest rates will probably go even higher (supply and demand), and we could be seeing half or more of the US budget directed to paying the interest on that debt.

 

I was jokin

And yes, we are fucked. I have been saying that for a year (along with others). You can't borrow your way out of this. You can't get in trouble for living above your means, and then expect to get out of it by living above your means.

It's not rocket science. We just have really fucked up people in Washington (and not just this administration).