The U.S. government is spending $88 billion a month in interest on national debt—equal to spending on defense and education combined
https://finance.yahoo.com/economy/policy/articles/u-government-spending-88-billion-111740601.html
Posted by geoabitrage
3 Comments
This is the weirdest grouping. And its not even right.
The federal defense budget for 2026 is 1.5 trillion. The education budget is 159 billion.
Thats a total of 1.66 trillion annual, or roughly 138 billion a month.
What really grinds my gears about it though, is acting like education spending is comparable to defense spending, when it’s a tenth the size.
The interest payments on government financial assets actually held on the open market are what make those assets effective as instruments of central bank monetary policy.
The purpose of these assets is to soak up excess liquidity that would otherwise overheat private sector lending and borrowing. Interest paid is investors’ incentive to park their money with the government rather than lend it out to businesses.
Meanwhile, the interest payments on government debt owned by the central bank itself (a sizable portion) is neutral. These payments only exist as a byproduct of the formal / legal separation between the central bank and the government.
Effectively the government is making interest payments to itself. It’s an accounting fiction.
What’s real and very important is the quantity of debt held by the market; the central bank controls this by participating in the market as a buyer and seller.
The rest doesn’t matter so much.
So they have to cut education is what they are saying. Even though defense is 90% of monthly interest debt.
Same logic will be applied to Social Security and Medicare