SEARCH BLOG: ECONOMY.
Five trillion dollars in new debt will allow Obama to pursue his second-term political objective of a bigger and more intrusive federal government that serves his interests and those of his political allies. With a compliant Fed and willing foreign bond buyers (largely in Asia), he might be able to stave off the bond market vigilantes throughout his second term, if he is lucky. But he will leave his successor with a $20 trillion debt. At a “normal” interest rate of five percent, Obama’s successor will face annual interest payments of one trillion dollars. To gain some perspective, the CBO projects social security to cost one trillion in 2018. Our interest payments on the national debt (at 5 percent) would roughly equal the entire cost of social security!A trillion here, a trillion there; pretty soon you're talking real money.