Ignoring The Problem?
The Cost of Paying the Debt Now
By starting today, the Federal Government can pay off the National Debt in 30 years by making interest and principal payments of $699,013,323,930.52 per year (see the chart below). In Fiscal Year 2009 the government made interest payments of $383,656,592,545.78. So it would take an additional $315,356,731,384.74 in annual payments to completely extinguish the debt in 30 years. By starting now, the total cost of interest will be $8,883,038,042,900.88 (8.883 trillion), at 4%, over 30 years.
Opportunity Cost: Waiting until 2019 [updated]
If the Federal Government chooses to wait until 2019 before addressing the debt, the cost rises dramatically. If we choose to wait, our annual principal and interest payments will rise to $1,111,746,741,447.46 per year (see chart below), an increase of $412,733,417,516.94 in annual P&I payments. The total interest on the debt will rise to $20.4 trillion which is computed by adding the $14,128 billion at 4%, over 30 years plus the $6,271 billion in 4% interest only payments, over the first 10 years (shown here). Thus, the cost of waiting is an additional $11.514 trillion ($20,397 billion minus $8,883 billion) in interest.
So What Are You Waiting For?
Are you wondering what will happen when interest rates rise? If politicians were serious about fiscal responsibility, surely they would find a way to cut government spending. All of Washington, DC is guilty. The longer you ignore a problem, the greater it becomes. America needs to stop the deficit spending ‘now’. Politicians need to start paying off the debt, and to put an end to annual budget deficits. Politicians need to stop making excuses, and quit playing political games.