Interest on the debt is getting much easier to pay

Do you know anyone who (inexplicably) is still nostalgic for the surpluses we were running in the late 1990s?  If so, tell them to ignore the following chart, because it might induce cognitive dissonance. 

Click to enlarge.

The type of economy I like better is one that makes the growing interest on the growing debt easier and easier to pay.  In other words, I like today’s economy better. 

Comments

[DrToast]

Is it possible that debt with higher interest rates have been refinanced at lower interest rates in the past few years?

[Steve]

DrToast:

Yes, that's the other factor. I've mentioned it before, and should have mentioned it again here, to cover all the bases. Good catch.

[jk]

...figures lie and lie...

Would I rather have the steep rate of decline in the surplus years or the stagnent if not upwardley bound curve

what happens when all the money stolen (I mean burrowed) from Social Security comes due?

[Wellstone]

Steve, this is an outright lie. Revenues have NOT been growing, they have just begun to catch up to the Clinton era revenues because of tax cuts.

What HAS happened is that with Greenspan's slashes, interest rates dropped.

TAX REVENUES 1999-2005, adjusted for inflation, in billions of dollars, taken from the White House Budget Office:

http://www.whitehouse.gov/omb/budget/fy2007/pdf/hist.pdf

1999 - 1874.9
2000 - 2025.5
2001 - 1946.1
2002 - 1777.8
2003 - 1667.0
2004 - 1712.5
2005 - 1898.3

http://www.publicdebt.treas.gov/opd/opdint.htm

INTEREST PAID ON DEBT:

1998 $363.8
1999 $353.5
2000 $362.0
2001 $359.5
2002 $332.5
2003 $318.1
2004 $321.5
2005 $352.5

[Syphax]

Its unfair to mention lower interest rates while ignoring the 2000-2001 recession. Yes lower interest rates have kept the burden of our debt lower, but along we lower interest rates we had lower GDP growth(from 2001-2002). In other words...

Recession in 2001=lower revenues+lower interest rates

lower revenues=deficits

deficits(caused as a result of the recession)+lower interest rates(also a result of the recession)=stable interest on debt

So if a recession never happened lower interest rates wouldn't have been needed to lower the interest on our debt.

As far as growing revenues... Revenues have indeed been growing since 2004(As your stats show). They picked up a little late because taxes are paid on income for the previous year. The increase in revenues was delayed but after accounting for that revenues have increased with the growing economy.

One also has to take into account the large revenues from the capital gains tax(which was actually reduced to 20% during clinton) during the stock market boom. This inflated revenues above what they would normally be and is a big reason why it has taken so long to catch up with the 2000 revenues.