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The Coming US Default
The US federal deficit is so large -- $12 trillion and spiking rapidly -- that it can seem abstract. That is about to change. Debt service has been manageable, thanks to low interest rates and consistent economic growth. But, according to the Congressional Budget Office, annual interest payments on the federal debt -- currently about $200 billion -- will total $916 billion by the year 2020.

How much is $916 billion? It is more than the US currently spends on social security. And it will represent 18% of federal spending in 2020 -- nearly as much as defense. "In 20 years, if you look at combined debt service, social security and health care, those are going to cost us more than the current tax system is capable of raising," says David Wyss, chief economist at Standard & Poor's.

http://www.npr.org/templates/story/story.php?storyId=126413824

Filed under: Budget Debt Default USA
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