EDITORIAL: ‘Most predictable crisis’ in history continuing as predicted

Interest payments on the debt recently surpassed spending on defense and Medicare, according to the Committee for a Responsible Federal Budget. In the first seven months of this fiscal year, it cost the federal government $514 billion to service the debt.

Context can help. For instance, over the same time period, defense spending totaled $498 billion. Medicare cost $465 billion. The United States spent more on interest than on transportation, veterans and education combined.

This is the inevitable result of a government that refuses to exercise fiscal restraint. In just the past decade, the debt has doubled and now sits at nearly $35 trillion. That figure borders on the unfathomable.

America’s population is nearing 340 million. Each American’s share of the interest costs now exceeds $1,500. And that’s just since October. Each individual’s share of the national debt is more than $100,000. That includes every newborn and retiree. If you’re looking for a unique birthday gift for your grandson, consider a card with a big IOU. That’s the legacy older generations are leaving their grandchildren and great-grandchildren.

The problem continues to worsen. In fiscal 2020, interest payments ran to $345 billion. Last year, it was $659 billion. By the end of this fiscal year, servicing the debt is projected to cost $870 billion.

One cause of the spike is the Federal Reserve boosting the cost of borrowing. That was a long overdue move to tame inflation, which remains significantly higher than when Donald Trump was in office. But higher interest rates don’t just affect credit cards, auto loans and mortgages. They’ve made carrying the national debt much more expensive. Thanks a lot, Joe Biden.

The federal government won’t go bankrupt. If politicians are unwilling to cut spending or raise taxes, the Treasury can print more money. But that will boost inflation, which flourishes when there’s too much money chasing too few goods. The Federal Reserve can then raise interest rates, but that will exacerbate the debt burden. The government will then print more money to cover the higher costs. Absent austerity measures, this is the doom loop that leads to hyperinflation and economic collapse.

Former House Speaker Paul Ryan has warned for years that the national debt is “the most predictable crisis” in the country’s history. It’s not a popular opinion, but these interest payments are another reminder of how right he was.