U.S. Interests Paid on Its Debt to Triple, to $554B

It is well known that the humongous budget deficits are are a ticking time bomb. The U.S. Treasury Department now says that what it pays to service the national debt will triple amid record budget deficits.

Interest expenses will rise to 3.1% of GDP by 2016, and to an all-time high of $554B in 2015, from the current 1.3% in 2010, or $185B.

The government forecasts to run cumulative deficits of more than $4T through the end of 2015.

Current interest rate expenses have been relatively low (and that is  a big "relative"), in spite of the massive debt, because rates have been kept so low.

However, as per Bloomberg report, bond yields are now rising.

"The amount of marketable U.S. government debt outstanding has risen to $8.96 trillion from $5.8 trillion at the end of 2008, according to the Treasury Department. Debt-service costs will climb to 82 percent of the $757 billion shortfall projected for 2016 from about 12 percent in last year’s deficit, according to the budget projections. "

"That compares with 69 percent for Portugal, whose bonds have plummeted on speculation it may need to be bailed out by the European Union and International Monetary Fund".

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