{"id":30477,"date":"2018-02-02T10:30:32","date_gmt":"2018-02-02T15:30:32","guid":{"rendered":"http:\/\/olduvai.ca\/?p=30477"},"modified":"2018-02-02T10:30:32","modified_gmt":"2018-02-02T15:30:32","slug":"danger-ahead-for-u-s-govt-unable-to-service-debt-as-interest-rates-surge","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=30477","title":{"rendered":"DANGER AHEAD FOR U.S. GOVT: Unable To Service Debt As Interest Rates Surge"},"content":{"rendered":"<header class=\"entry-header clearfix\">\n<h3 class=\"entry-title\"><a href=\"https:\/\/srsroccoreport.com\/danger-ahead-u-s-govt-unable-service-debt-interest-rates-surge\/\">DANGER AHEAD FOR U.S. GOVT: Unable To Service Debt As Interest Rates Surge<\/a><\/h3>\n<p class=\"entry-title\"><strong><span style=\"color: #333333; font-size: 16px;\">The U.S. Government is in serious trouble when interest rates rise.\u00a0 As interest rates rise, so will the amount of money the U.S. Government will have to pay out to service its rapidly rising debt.\u00a0 Unfortunately, interest rates don\u2019t have to increase all that much for the government\u2019s interest expense to double.<\/span><\/strong><\/p>\n<\/header>\n<div class=\"entry-content clearfix\">\n<p>According to the TreasuryDirect.gov website, which came back online after being down for nearly a month, reported that the average interest rate paid on U.S. Treasury Securities increased from 2.2% in November 2016 to 2.3% in December 2017.\u00a0 While this does not seem like a significant change, <strong>every increase of 0.1% in the average interest rate, the U.S. Government has to pay an additional $20.5 billion in interest expense (based on the $20.5 trillion in total U.S. debt)<\/strong>.<\/p>\n<p>Already, the U.S. Government is off to a BANG as it\u2019s interest expense paid for the first three months of the year increased to $147 billion compared to $139 billion in the same period last year:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-18178\" src=\"https:\/\/d363rfd1yb12dr.cloudfront.net\/wp-content\/uploads\/2018\/02\/US-Oct-DEC-2015-2017-Interest-Expense.png?x65756\" alt=\"\" width=\"650\" height=\"424\" \/><\/p>\n<p>This chart was taken directly from the TreasuryDirect.gov site, with my added annotations.\u00a0 As we can see, the U.S. Government paid $126.5 billion to service their debt Oct-Dec 2015.\u00a0 We must remember, the U.S. Government Fiscal period starts in October.\u00a0 So, in just two years, the interest expense the U.S. Government paid for Oct-Dec increased more than $20 billion.\u00a0 Now, what is interesting is that the average interest rate in Dec 2015 was 2.33%, but in Dec 2017 it was only 2.31%.\u00a0 Thus, it was actually lower, even though the interest expense increased by $20 billion.<\/p>\n<p><strong>The reason for the $20 billion increase in the interest expense during Oct-Dec 2017 versus Oct-Dec 2015 was due to a more than $2 trillion increase in U.S. debt over that two-year period<\/strong>.\u00a0 So, the U.S. Government will have a serious problem as interest rates really start to rise\u2026 and that doesn\u2019t even include the continued increase in total U.S. debt.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>DANGER AHEAD FOR U.S. GOVT: Unable To Service Debt As Interest Rates Surge The U.S. Government is in serious trouble when interest rates rise.\u00a0 As interest rates rise, so will the amount of money the U.S. Government will have to pay out to service its rapidly rising debt.\u00a0 Unfortunately, interest rates don\u2019t have to increase [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,15377,431,534,12073,843],"class_list":["post-30477","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-debt-servicing","tag-interest-rates","tag-monetary-policy","tag-srsrocco-report","tag-us-government"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30477","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=30477"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30477\/revisions"}],"predecessor-version":[{"id":30478,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30477\/revisions\/30478"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=30477"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=30477"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=30477"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}