2010 is looking rough for the federal government. There is massive debt are coming due in the months ahead. The prospect of raising higher interest rates, and short-term balloon debt are due is in store for the US Treasury.
The Treasury is looking to exchange short-term debt to long-term low-interest rate bonds. In other words, the federal government will face “sticker shock.”
The White House acknowledge that By 2019 the debt service on $12 Trillion is an astonishing $700 billion a year. That’s up from $202 billion this year. Government forecasters project annual deficits shrink. Other economist think otherwise.
About $500 billion in interest would total will exceed the federal department budgeting including Education, energy, homeland security and the defense departments for the wars of Afghanistan and Iraq combined.
The high levels of debt justified due in large part of US economy. With the global credit crisis and this recession,The Bush and Obama Administration did what they did due to circumstances. But now Washington is divided on how to reducing the deficit quickly and safely. And Postpone the debt payoff is impossible.
New York Times has more.