This is the scariest part: “That will cause interest rates to rise. Within a decade, interest is going to be one third of all of your taxes, and in a couple decades, interest could be 80% of your taxes.” So I was curious and looked up the evolution of federal interest payments over time as a percentage of federal income, so I made a custom chart on the Fed's website: https://fred.stlouisfed.org/graph/?g=1KFPP#
We see that the percentage rose from about 12% in 2022 to about 21% today, a very sharp increase indeed, as the article points out. And the article's authors project it to rise to ~33% within a decade. But interestingly we see the percentage was historically quite high in the 80s (peaked at 29% in 1985) before decreasing through the 1990s and 2000s. So at least we have a precedent that it is possible for the US government to get a grip and manage to reduce the share of interest payments. How they did it, I don't know.
PS: when making this custom chart I wasn't quite sure what data series to take as federal income. There seems to be two options:
1. Federal Government Current Receipts, Billions of Dollars, Seasonally Adjusted Annual Rate (FGRECPT)
2. Federal government current tax receipts, Billions of Dollars, Seasonally Adjusted Annual Rate (W006RC1Q027SBEA)
I took the first. The chart has generally the same shape with #2 but I am not quite sure what the difference is. You can click the button "Edit Chart" to test various data series.
We see that the percentage rose from about 12% in 2022 to about 21% today, a very sharp increase indeed, as the article points out. And the article's authors project it to rise to ~33% within a decade. But interestingly we see the percentage was historically quite high in the 80s (peaked at 29% in 1985) before decreasing through the 1990s and 2000s. So at least we have a precedent that it is possible for the US government to get a grip and manage to reduce the share of interest payments. How they did it, I don't know.
PS: when making this custom chart I wasn't quite sure what data series to take as federal income. There seems to be two options:
1. Federal Government Current Receipts, Billions of Dollars, Seasonally Adjusted Annual Rate (FGRECPT)
2. Federal government current tax receipts, Billions of Dollars, Seasonally Adjusted Annual Rate (W006RC1Q027SBEA)
I took the first. The chart has generally the same shape with #2 but I am not quite sure what the difference is. You can click the button "Edit Chart" to test various data series.