The interests paid by the United States on its national debt are estimated to have surpassed US$1 trillion on an annualized basis as of the end of October, according to a report by Bloomberg on Tuesday.
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The Bloomberg analysis shows that the projected amount has doubled in the past 19 months from the equivalent figure forecast around the time. The projected amount represent 15.9% of the entire federal budget for fiscal year 2022 as of the month of October.
The calculations were based on US Treasury data, which discloses the government’s monthly outstanding debt and the average sum of interest it pays.
“This high proportion of interest payments as a share of federal spending has precedent, as the portion before 2000 was over 14% in most years,” Bloomberg analysts wrote in a note.
“The challenge for the government is tempering mandatory spending and trying to reduce the need to issue more debt. That’s the reason we see interest payments climbing even though we forecast lower Treasury yields.”
The outlet stated that US Treasuries may face renewed selling pressure into the new year if one measure of the nation’s swelling debt repayment bill is any guide.
Concerns are mounting over US fiscal policy amid massive government borrowing and soaring interest payments on the debt pile, the outlet noted.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur