A Note Regarding the Federal Debt

October 7, 2013

    The U. S. Federal Debt, currently running $17 trillion, isn't, to my knowledge, an imminent threat. What's important is the cost of servicing the federal debt. That depends upon the current interest rate the U. S. government has to pay on government bonds Although federal deficits have been running at record highs, interest rates have been running at historical lows. The relative cost of servicing the national debt peaked in the 1990's, and is now running, I believe, a little over half that amount. Barring another recession and another round of swollen safety net costs, the deficit should begin to recede as a fraction of Gross Domestic Product.
    I'm not saying the running huge deficits is a good thing... only that I don't think it's as pressing a problem as it was in the 1990's.