Today’s Wall Street Journal story by a host of financial and government writers offers a particularly scary look at the U.S. debt crisis.
The upshot is that the federal deficit from the last four years — all $5.2 trillion of it — is only the tip of the iceberg. The Treasury must raise $4 trillion this year alone to service interest payments on the cumulative debt.
Low interest rates that are designed to help bolster the housing market and dampen inflation have kept the debt burden from being even worse.
Low interest rates also have signaled to stock market investors that U.S. economic growth will be sluggish for some time to come. Investors and the financial sector need higher interest rates to spark the kind of growth that would signal a true economic recovery.
If that happens, well, the federal debt service costs will rise dramatically.
The story is long, but worth the read. One scary factoid from the piece points out that debt has increased over the past four years by the equivalent of $55,000 per U.S. household.
How does that gibe with your net worth?
Can we just print some more money?