Interest on the debt is the fastest growing item in the federal budget, and in Fiscal Year (FY) 2023 the federal government will spend more on net interest than it does on spending that supports children.
We estimate that spending on children in FY 2023 will total about $555 billion – around $100 billion less than the Congressional Budget Office estimates we’ll spend on net interest. This will mark the first time net interest spending has overtaken kids’ spending in recent history, and we estimate that it will continue to do so indefinitely.
Our estimates combine some of the estimates used by the Urban Institute’s Kids’ Share report as well as our own methodologies in determining how much federal programs spend on supporting children. Major areas of federal spending for children include Medicaid, the refundable portion of the child tax credit, nutrition programs, and K-12 education, among many others.Committee for a Responsible Federal Budget
What a sad state of affairs caused by the inability of our government to enact prudent spending and taxation policy and the inability of citizens to accept the truth about both.
A question: Since the U.S Federal Reserve “buys” a lot of bonds to cover the expanding Federal deficit, is that factored into paying the debt interest? It seems like a magician’s trick to make it disappear? Am I wrong?
The FED is just like any other bond holder, interest is paid when cashed.
The politicians just do not care, because there is zero accountability when it comes to the tax, spend and borrow even more gravy train of the federal budget.
The politicians have caused this problem and we are naive to think that they will fix it in our lifetime.
There are three steps that are guaranteed to fix our budget problems, both household and government.
1. Increase income
2. Cut spending
3. Pay down debt
Won’t work for debt reduction or for curtailing annual deficits. Spending always stays ahead of tax increases. Do you ever notice revenue increases when taxes are cut? Spending is always on the rise.
1. It depends on consumer and business confidence.
2. It depends what else is happening in the economy.
3. It depends on which taxes are cut.
4. Ad infinitum
Nothing new or surprising in the report. That interest cost has been rising for years is nothing new. Since Keynes formulated his deficit spending theory to help governments overcome recession and depressions, there has been interest on federal debt. When got in trouble was with Bush II who spent like a drunken sailor and then Obama followed suit with Trump not backing down and now Biden wants to finish the job of tearing down the whole country. It doesn’t matter who you vote for or what they say to get your vote, you will b sold down the river as soon as they get in office. The debt and subsequent interest is always somebody else’s problem. I’m not taking the blame for it, I don’t run the train, I can’t operate the brakes on the budget, I can’t blow the whistle on the locomotive, all I can do is go along for the ride.
By the way, the fact that spending on interest outweighs the spending on kids is just saying that it is ok to spend hundreds of billions or trillions on various segments on whatever program sounds good. If the feds weren’t passing out dollars on various groups there wouldn’t be a deficit and a huge interest charge. I’ve got nothing against kids but they are the group singled out in the above report.
Everyone wants a free lunch. And the Congress — in an effort to get re-elected and become career politicians– provides that lunch!
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