Interest Payments on the Federal Debt

This research summary takes a look at the interest on the federal debt and analyzes how it affects economic growth and future private investment.

Massive increases in the federal debt have garnered public attention, however rising interest on the national debt is another concern among policy makers. In addition to challenges in lowering the total debt, the government may face additional challenges given its abundance of short-term debt with fast-approaching maturity dates. Furthermore, difficulties in predicting the level of future interest payments on the debt may mean that unexpected expenditures may place additional pressures on economic growth and future private investment. In any case, addressing concerns over large government spending and exercising fiscal discipline may be the best way to ensure sustainable interest payments in future years.

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