The US Government is $30.5 trillion in debt. It currently pays $437 billion in interest on that debt per year. The US government takes in $4.37 trillion in tax revenue per year.
So we pay 10% of our revenue each year in interest. Not too bad.
But do some simple arithmetic… $437 billion is 1.43% of $30.5 trillion.
As interest rates rise, that percentage rate will go up:
2.86% = $874 billion interest
5.72% = $1.78 trillion interest
We are almost assuredly going to hit these rates across Treasury yield curve over the next year or two. Series I Treasury bonds are already paying 9.6%!!
What’s going to happen when we’re paying almost half of revenue on interest on our debt?