The US is spending a huge amount of cash per day just to cover interest on the national debt, according to the chief economist at the multinational investment giant Apollo Global Management.
Citing data from the Treasury Department, Apollo’s Torsten Sløk says the US government is now spending an average of $3 billion in interest expenses every 24 hours.
That’s up from about $1.5 billion at the start of 2022.
Net interest expense, which has eaten up $763 billion through fiscal year 2024, is now the second-largest budgetary item after Social Security, which is expected to take up $1.213 trillion, according to the latest report from the U.S. Treasury Department.
For the full fiscal year 2024, interest on the national debt is expected to hit $1.157 trillion.
And although rate cuts appear to be on the horizon, Sløk says daily billion-dollar-plus payments are set to continue.
“If the Fed cuts interest rates by 1%-point and the entire yield curve declines by 1%-point, then daily interest expenses will decline from $3 billion per day to $2.5 billion per day.
According to the Treasury Department’s ‘Debt to the Penny’ database, the national debt hit a new record high at $35.346 trillion on September 9th.
As of September 12th, that number stands at $35.273 trillion.
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