Debt Spiral

"It is impossible to know exactly when the next recession will hit. But when it does, two things will happen. One, people will lose their jobs, so tax revenue will fall. And two, more people will start claiming entitlements like welfare, which means the government will have to spend more money. Since these two trends are mathematically exclusionary, the government will likely resort to borrowing even more money, bloating the national debt even faster. This happened during the last recession, and America is in an even worse predicament this time. The federal government is over $22 trillion in debt. It has borrowed almost $6 trillion from its Social Security Trust Fund (intragovernmental debt) and over $16 trillion from outside investors (public debt). Last year, it paid an astounding $324.7 billion in interest payments on its debt - roughly half of what it spends on defense. Data from the U.S. Treasury Department's Office Of Debt Management shows that the government is only five years away from the point where every new dollar it borrows will have to be paid as interest on the debt. This is called a debt death spiral. The government will soon be borrowing money to pay the interest on money it has already borrowed." - A. Miller (October, 2019)