Back in July, when we last looked at the unprecedented horror show that is the US budget deficit – and concluded correctly, long before the Q2 Quarterly Refunding Announcement, that debt issuance was about to explode and yields would soar – we warned that the debt Rubicon was about to be crossed and “US Debt Interest Payments Are About To Hit $1 Trillion.”
Fast forward to today when the endgame has apparently arrived: according to the Treasury’s own calculations, total interest is now over $1 trillion (or $1.027 trillion to be precise).
We calculated this by multiplying the average interest rate on marketable US Treasury debt (which according to the Treasury is 3.096% as of Oct 31) by the $26.003 trillion in marketable US debt (as of Oct 31) which nets off to $805 billion, and adding to this non-marketable debt interest (which as of Oct 31 was 2.884% multiplied by the amount of non-marketable debt which is $7.696 trillion) and which in turn is an additional $222 billion in interest. Add across and you get $1.027 trillion.
Naturally, this calculation of estimated real-time interest costs – which is entirely based on Treasury data – is different than what the Treasury actually…
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