A recent analysis by Torsten Sløk, chief economist at Apollo Global Management, has revealed the staggering cost of the US government’s growing national debt. According to Sløk’s post on the asset management company’s blog, the US government is now paying an average of $3 billion per day in interest expenses, including weekends. This represents a dramatic increase from the $1.5 billion in daily interest payments at the beginning of 2022.
The data, cited from the US Treasury Department, paints a concerning picture of the escalating interest burden. At this rate, the government is projected to pay a whopping $1.157 trillion in interest for the entire fiscal year 2024. This astronomical figure underscores the growing pressure on the government’s budget as the national debt continues to climb.
The national debt itself is on track to hit a new record of $35.346 trillion by September 9th, and as of September 17th, it currently stands at $35.378 trillion. This alarming rise in the national debt is directly linked to the increasing interest payments, creating a vicious cycle of rising debt and escalating costs.
Sløk highlights the potential impact of interest rate cuts on these daily interest expenses. He notes that if the Federal Reserve were to lower interest rates by 1% and the entire yield curve declined by the same amount, the daily interest payments would decrease from $3 billion to $2.5 billion. However, this remains a hypothetical scenario, and the actual path of interest rates and the national debt remains uncertain.
