Interest Payments Surpass Defense Spending: A Historic First

Impacts of Kamala Harris' Decisions

When asked if she would have done anything differently than President Biden during the past four years, Kamala Harris responded that she couldn't think of anything. She has been part of most of the decisions that have had an impact. The Treasury Department released a report on Friday that highlights the kind of impact Harris is referring to, and it could potentially influence her electoral chances.

Federal Deficit and National Debt

The latest Treasury report shows spending and revenues for the full fiscal year 2024, which ended in September. The federal deficit reached a staggering $1.8 trillion in 2024, the third highest in history, only surpassed by the two years of panic spending due to COVID-19. Despite revenues increasing by nearly half a trillion dollars this year, spending under the Biden-Harris administration climbed more than $617 billion, a 10% increase.

Interest Payments on National Debt

The real surprise, however, is the dramatic increase in interest payments on the national debt. These payments reached $882 billion in FY 2024, a 35% jump from the previous year, according to the Treasury report. This amount is $8 billion more than what was spent on National Defense. For the first time in the nation's history, interest on the debt has surpassed defense spending. The gap is projected to widen rapidly, with the government expected to spend $200 billion more on interest than on protecting America from her enemies by 2029.

The Role of Harris' Decisions

The massive increase in interest costs can be attributed to Harris' tie-breaking votes, something she often boasts about. The Biden-Harris administration added trillions in new spending at a time when the economy had already fully recovered from the COVID-19 panic. This led to a significant increase in inflation, which subsequently drove up interest rates. More debt and higher interest rates resulted in a sharp increase in the cost of financing that debt.

Comparing to Previous Administration

Before Biden and Harris took office, the Congressional Budget Office (CBO) projected net interest payments for the next decade, based on the policies that Donald Trump had in place. The CBO stated that if Biden had not overspent, interest payments on the national debt this year would have been only $284 billion. Therefore, Harris and her tie-breaking votes are responsible for a 210% increase in interest costs this year alone.

Future Prospects

It remains unclear what Kamala Harris would do about this situation if she were elected president, as no one has asked her. However, it is known that she wants to continue the policies she and Biden have already implemented: adding trillions of dollars of inflationary spending, imposing economically damaging tax hikes, and introducing more growth-stifling regulations. Harris does agree on one thing: it is time to turn the page, but the question is, before what?

Bottom Line

This historic moment, where interest payments on national debt have surpassed defense spending, raises numerous questions about the current economic policies and their long-term impacts. It's a situation that calls for reflection on the decisions made and their consequences. What are your thoughts on this matter? Do you think this could have been avoided, or was it an inevitable outcome? Share this article with your friends and let's start a conversation. And don't forget to sign up for the Daily Briefing, every day at 6pm.