Real Wealth Society

Wednesday, October 11, 2006

Interest time bomb By BabylonToday

Hey All,
I fear the last email didn't do so hot so I thought I would try it again.
The numbers for fiscal 2006 are in and the bleak prospects of our
exponentially escalating interest expense bodes particularly ill toward
any hopes of balancing any future budgets. Interest expense on our debt
for fiscal 2006 totaled 405 billion, blowing away the next highest
interest expense total in 1998 of 363 billion. At 405 billion, interest
expense for 2006 composed a whopping 70% of our total on-budget deficit
for the fiscal year.

What will happen to this debt now that higher average interest rates are
required to service our national debt, following 14 consecutive Fed rate
hikes? Average issued debt maturity is just 55 months (and getting time

With total U.S. debt at 8.506 trillion dollars, this resulted in an
on-budget deficit for 2006 of 574 billion, the second largest in our
nation's history, just 22 billion under the all time record deficit set
in 2004. The very next reported day - the first day of the new fiscal
year (October 2, 2006) - U.S. debt increased by over 42 billion
dollars. If this had been added to the reporting day before, the total
deficit for 2006 would have shot up to 616 billion, blowing away the
former all time record deficit of 2004 by 20 billion dollars.

Here is a chart of monthly debt increase.

God bless,


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