Now that the budget bill has passed Congress, we can see clear projections for how it will impact deficits, government debt, and debt service expenses.
In brief, the bill is expected to lead to spending of about $7 trillion a year with inflows of about $5 trillion a year. So the national debt, which is now about 6x of the money taken in, 100% of GDP, and about $230,000 per American family, will rise over ten years to about 7.5x the money taken in, 130% of GDP, and $425,000 per family. That will increase interest and principal payments on the debt from about $10 trillion ($1 trillion in interest, $9 trillion in principal) to about $18 trillion (of which $2 trillion is interest payments). This will lead to either a big squeezing out (and cutting off) of spending and/or unimaginable tax increases or a lot of printing and devaluing of money and pushing interest rates to unattractively low levels.
This printing and devaluing is not good…
