The Cost of Previous Debt
Monday, May 17, 2010
Every year, the federal government spends about 10% of its outlays on paying the interest of previous debt. This is approaching the total % of federal outlays spent on national defense.
That is to say, the yearly cost of the borrowing of previous generations will be about the same as the cost of two wars and over 700 military bases.
Outlays as a percent of GDP:
The Office of Management and Budget, The White House, FY 2011 Budget, Historical Tables, Table 3.1—Outlays by Superfunction and Function: 1940–2015, http://www.whitehouse.gov/omb/budget/fy2011/assets/hist03z1.xls (descriptions).
Mimics page 37 of http://www.piie.com/publications/papers/ferguson201005.pdf (audio).