(The Center Square) – The nation’s growing debt is costing taxpayers.
The cost of borrowing money is taking up a larger share of the federal budget, which along with the rising costs of Social Security and Medicare, are driving up the national deficit.
Interest costs on the country’s $33 trillion debt increased 23% to $879 billion. That’s a record high. Interest costs accounted for 14% of total federal spending as of September 2023.
The cost of maintaining that debt is expected to grow. The Congressional Budget Office released projections in June that showed interest costs would “exceed all mandatory spending other than that for the major health care programs and Social Security by 2027, all discretionary outlays by 2047, and all spending on Social Security by 2051.”
Daniel Smith, an economics professor at Middle Tennessee State University, said the effects of carrying that much debt will grow over time.
“The interest rate costs of our national debt will continue to grow and will account for 35% of all federal revenues by 2053,” he told The Center Square. “As our debt service costs increase we can either reduce expenditures on government services or increase our deficits, which will only contribute to our growing national debt.”
Smith said there’s no clear tipping point.
“Rather than a specific tipping point where a specific threshold is reached this is more like the proverbial frog boiling in a pot,” he said.
Marc Goldwein, the senior vice president and senior policy director for the Committee for a Responsible Federal Budget, noted Tuesday that interest costs have doubled since 2020.
“Interest is the fourth-largest government program,” he wrote on X, the social media platform formerly known as Twitter. “We spend more on interest than we do on kids, at the federal level.”
Michael Hicks, director of the Center for Business and Economic Research at Ball State University, said drivers of the growing debt matter.
“To put this in context, a 30-year mortgage probably has about half the monthly payment as interest. So, for folks thinking of the U.S. government like a household or business, there’s plenty of room for more borrowing,” he told The Center Square. “The problem is that the deficit (and debt) is fueled primarily by entitlement spending. So, the ability to make cuts is very limited, and immediately impacts priorities of great importance to national security.”
