We’re going to look at the growth of the U.S. national debt a little bit differently today. Instead of noting when it will likely exceed the typical milestones that usually get tossed around, say when its set to exceed $18 trillion (next year) or some percentage value of GDP, we thought it might be interesting to consider when just the net interest that the federal government must pay on the national debt will exceed some major future milestones.
The Congressional Budget Office created the following chart to illustrate when some of those key milestones will be hit in their most recent Budget and Economic Outlook:
The chart is not the easiest thing to read, so let’s list out the milestones. The following list indicates the year in which the CBO projects that federal net interest payments on the national debt will exceed the annual amounts that the government spends on the following expenditures:
2018: Other Mandatory Spending – This category includes welfare programs like unemployment benefits, the Earned Income Tax Credit, the Supplemental Nutrition Assistance Program (better known as “food stamps” and the Supplemental Security Income program that provides payments to Americans with disabilities. It also includes the spending to sustain military and civilian retirement programs and benefits.
2018: Half of Social Security – The second largest category of federal government spending.
2019: Non-Defense “Discretionary” Spending – This category covers everything from the AbilityOne Commission to the Woodrow Wilson International Center for Scholars, or rather, every federal agency that isn’t defense-related.
2020: Defense “Discretionary” Spending – If it goes to fund the Army, Navy, Air Force, Marines, or Coast Guard, and is managed out of the Pentagon, it’s covered in this category.
2022: Half of Major Health Care Programs – Which would be half the spending that goes to Medicare, Medicaid, the Children’s Health Insurance Program, and the Affordable Care Act’s Exchange subsidies.
If the national debt were smaller, it wouldn’t have to make such large payments to the people, organizations and government entities that have loaned it money. Instead, the federal government will have nothing to show for what it spends on the net interest for its debt, other than a paid I.O.U. And more likely than not, even more debt, which today’s infants will be paying off for decades.
How’s that for a milestone moment?
U.S. Centers for Disease Control