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Strategies & Market Trends : The Art of Investing

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Dec 11 4:00 PM EST

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To: Sun Tzu who wrote (3511)	2/3/2022 9:55:18 PM
From: Sun Tzu	3 Recommendations Recommended By ajtj99 Jacob Snyder kidl of 10695

Here's a graph of US interest rate payments as a percentage of tax revenue. The final point on the graph is ~15%. Note that the end point of the graph is 2020 where there interest rates were abnormally low. Also note that the payments in 2020 were about the same as in 1982. I checked the data, and we now have 30x more debt than we did in 1982. If the interest rates rise to just below the inflation rate i.e. triple, then the government will have to pay nearly half of its revenue in interest payments!! That is not going to happen. To be fair, the taxes were also below normal in 2020, so my math is a bit off. But the point remains because even 1/3 or 1/4 of revenue going to interest payments will be problematic. My guess is that eventually the US will impose capital controls as it has done every time it was in a tight bind. You've been warned. PS The situation for corporate and personal debt is better, but not by much. PPS The source is here: data.worldbank.org

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