Ok, so I just got done listening to the TOTUS once again pontificate about how moderate changes in the budget can make things work.This is a lie.
Here's another spreadsheet proving it - if we do not cut this crap out right now, we will become Greece.
I know you don't want to hear this. I know full well that there are a lot of people who believe they're entitled to their benefits, to their Medicare, to their Social Security, to their Welfare and Food Stamps.
I understand.
The math doesn't care what you claim you're entitled to, nor what I believe you're entitled to, nor what Congress wishes to grant you.
Here are the facts:
- Government debt has grown 11% in each year for the last three years, more or less. This is a fact which you can verify from the Treasury's "Debt To The Penny" series. Please do so, because I hate having to post the numbers after someone pops up and claims I'm lying.
- GDP growth since 2000 has averaged 4.1%. I'll use that number, even though our current GDP rate is under 2%. This spreadsheet is a lot worse at 2.1%; government interest expense exceeds GDP (or government size) about 10 years faster!
- I am using a blended interest rate of 3% on government debt. This is consistent with the Treasury's own current numbers. It is also very low on a historical basis. I presume it will not rise, which is likely foolish. If it rises, the spreadsheet gets a lot worse.
- I am using a government growth rate, all-in, of 5%. This provides us a doubling time of about 14 years. This is too conservative since 2000 (government has doubled in size in the decade, which is about 7%) but I am assuming we cannot maintain 7%.
Here's the deal. With these assumptions right now interest expense is about 11.3% of government's total budget. Within ten years it is 21.3%. In 10 more it will be 40.52%. In 10 more, that is 30 years from now it will be 76.98% (!) - in theory. And in 35 years, it will consume the entire government budget.
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