March 24, 2017

Interest on Deficit Becomes Burden

With the 2010 Elections only 50 days away, the federal deficit is among the most important issues. The trend of the deficit has reversed since 1999, as the chart below shows, from being at a surplus in the latter half of the decade to falling in the red in the former half. Moreover, as the deficit continues to grow, the interest on the deficit correspondingly grows as well. During 2008, interest on the deficit was $260 billion – more than the total costs of both Medicaid and unemployment benefits at $248 billion, according to the Congressional Budget Office.

Notice that deficit interest for a year reflects the preceding years more so than the year itself.

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