U.S. Interest Payments to Exceed Defense Budget
The Federal Reserve’s “war on inflation” is going to cost the United States government. During fiscal year 2022, the government spent $475 billion in interest payments on its public debt (which does not include money looted from Social Security and other intragovernmental accounts). That is 35 percent more than the $352 billion the government spent on interest payments the previous year. And higher Fed rates means the government will spend even more on interest next year.
Shifting priorities: According to Moody’s Analytics, federal interest payments could exceed the country’s entire defense budget. The Federal Reserve is expected to raise rates to 4.5 percent in December, which means that the government will be spending nearly $737 billion in gross interest payments on an annualized basis. That is more than the $677 billion it spends on education and nearly as much as the $800 billion it spends on defense. In fact, Moody’s Analytics further predicts that the government will be spending more on interest payments than on national defense by 2026.
Tipping point: Financial historian Niall Ferguson has warned that nations and empires usually fall apart when the cost of servicing their debts exceeds the cost of defending their borders. Based on current budget projections, America will reach this tipping point in three or four years. And if Fed rates spike faster, it could reach this point much sooner.
Prophecy says: In ancient times, God instructed the Israelites that blessings come from obedience to His laws, just as curses come from disobedience. In Deuteronomy 28, God specifically warned that debt problems are one of the many curses that come from disobedience. Specifically, God warned that if the Israelites turned away from Him, strangers would lend them money, but they would not lend to others. To learn more about the dangers of out-of-control government spending, read “The Biggest Threat to America’s National Security.”