Federal Spending Crisis: Interest Payments Surpass Defense and Healthcare

Our leaders ignore the growing debt as interest costs threaten Social Security.

Federal spending is out of control to the point that we are now spending more on the interest of the federal debt than on our national defense, health, medicare, education, and our veterans. Soon, the interest (not the debt payback), ONLY the interest, will overtake social security (our most significant expenditure). Yet, this situation is not being discussed by nearly any of our political leaders, especially not the two leading presidential candidates, Trump and Harris. Instead, both keep discussing projects that will increase the deficit and, thereby, the federal debt. Did you know we are spending over $6 trillion and only bringing in under $4 trillion from all sources? This gives us a 2024 projected deficit of around $2 trillion, which we must borrow to pay for all this spending. Our federal debt is now at $35 trillion. We must vote only for candidates who have plans to tackle this debacle!

Let’s get into this. Astonishingly, $455 billion—29% of every budget dollar—will soon go towards servicing interest payments, yet this is not benignly discussed in the regular news cycle and is a crisis. This fiscal reality underscores the economic peril of underwriting multi-trillion-dollar wars in an era of elevated interest rates.

The practical implications of our financial situation are profound. Despite the military-industrial complex's clamor for conflict, the economic feasibility of engaging in proxy wars is diminishing. The probabilistic distribution of the United States committing to extensive military involvement in Ukraine appeared low, while interest rates were low. Now, the notion of underwriting a multi-trillion-dollar war at 5% interest rates is a mathematical impossibility without catastrophic moral justification, such as nuclear proliferation.

Financial forces and energy interplay with international relations in this intricate geopolitical chess game. The situation in Ukraine, for instance, exemplifies this complexity. The United States, navigating our energy strategy and economic constraints, must also contend with the motivations of other global actors.

Russia is no longer facing increasing isolation, and economic sanctions have clearly not worked to cripple their economy, and it finds itself in an ever-increasing favorable position of independence. The unlikely deployment of tactical nuclear weapons, a morally reprehensible and globally destabilizing act, represents a drastic step. Yet, the pressures from major energy buyers like India and China to maintain stability serve as a counterbalance, deterring such extreme measures.

In Europe, economic downturns and reduced energy demand further complicate the landscape. A negotiated settlement emerges as a pragmatic solution that aligns with economic and geopolitical realities. The invisible hand of financial forces, intertwined with energy independence, subtly nudges global actors towards diplomacy over conflict.

Central to the role of central banks, particularly the Federal Reserve. Chairman Jerome Powell becomes a significant deterrent to war by maintaining higher interest rates. Though convoluted, fiscal and monetary policy complexity clearly influences international relations. In a world of zero interest rates, the propensity for war might be higher, driven by the financial ease of funding military endeavors.

The motivation behind geopolitical maneuvers, such as Putin's invasion of Ukraine, often goes beyond pure financial calculus. Pursuing superpower status, strategic dominance, and national security considerations are also pivotal. Yet, as we move toward zero-cost energy, the economic constraints imposed by nonzero interest rates will increasingly shape the geopolitical landscape.