RealMacro

US Gov't Interest Payments As A % of Gov't Tax Revenues

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I keep seeing posts all over social media claiming that interest payments on the Public Debt
are "unsustainable".

No. Interest payments must be viewed relative to Tax receipts to get the
full story.

Currently, the US Gov't interest payments on the debt are 27% of Tax revenues.
In the mid 80's interest payments were 49% of all tax revenues. Way higher
than today. Currently, we are at 1975 levels of interest paid on debt. More
than sustainable provided tax revenues continue to rise.

Why is this important for you to know as a trader? Bc it affects all asset classes.
(Stocks bonds, commodities, real estate, crypto) valuation.

Please don't fall for inane hockey stick charts without understanding the context.
Kommentar:
Interest payments as % of tax revenue have exploded higher from 19% to 31%.

"Quantity has a quality all its own."
Kommentar:
35% of Govt tax revenues are now going to interest payments. It is now the highest since 1996.

Real Macro Economic Investing
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