Tuesday, December 21, 2010

Obama Debt Increase

In less than two years, from Jan. 20, 2009 - Dec. 20, 2010, total federal debt has increased $3.256 Trillion.

The average interest rate on the marketable portion of that debt is 2.36%, and the average interest rate on the non-marketable portion 4.13%.

I do not have the figures for the past two years in terms of average interest rate on all debt issuance. Much of it is short term, which must be rolled over frequently. But if the average interest rate of new debt the Obama Administration and Democrat Congress has taken on was only 2%, that would mean interest on the money Obama's Treasury has borrowed in the last 23 months will cost us $65 billion next year. And the year after that. And the year after that. And the year after that.
I frankly don't know whether my guesstimate of 2% interest is correct, and of course as short term debt is rolled over that number will change as new bills will earn a new rate, whatever that is. (Every since Federal Reserve chairman Ben Bernanke started Quantitative Easing, which he claimed would lower interest rates, interest rates on virtually all Treasury debt has risen!) But even if the interest on Obama's borrowing was as low as 1%, it would still represent a staggering sum, just to pay the interest on it in the next ten years.

Get the picture? The spending Obama has been responsible for in only two years will cost the United States hundreds of billions of dollars in interest payments, just for the next ten year period alone.

Sources: US Treasury website
Interest rates, see http://www.treasurydirect.gov/govt/rates/pd/avg/2010/2010_11.htm
Total debt increase under Obama, see http://www.treasurydirect.gov/NP/BPDLogin?application=np