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Obama details budget plan; debt payments seen tripling

  • President Obama yesterday unveiled his $3.9T budget for fiscal-year 2015, confirming proposals that had already been flagged in advance. These include tax hikes for the rich and energy companies, extending the Earned Income Tax Credit, and increased spending on infrastructure and education.
  • As expected, Republicans weren't too impressed with the plans, although there is some commonality with GOP ideas.
  • Perhaps more interestingly, the government expects debt interest payments to more than triple over the next decade to $886B, due to higher interest rates and increasing debt.
  • The Administration also projects a deficit of $649B for this year, or 3.7% of GDP, a rate that is forecast to fall to 1.9% of GDP through 2018.
Comments (3)
  • AlexanderK_2020
    , contributor
    Comments (114) | Send Message
     
    Yes, the rates are always forecasted to fall, but rarely ever do.. More likely the deficit will be at least 3.7% or higher as the negative real rates on bonds will have to be increased if the FED isn't to end up buying more than the 70% it is already taking onto its balance sheets.
    5 Mar, 04:17 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    If the government says that interest payments are going to be ~$886,000,000,000.00 then that means they'll be closer to $1,500,000,000,000.00.

     

    The government always low-balls bad news...
    5 Mar, 04:50 AM Reply Like
  • Papaswamp
    , contributor
    Comments (2178) | Send Message
     
    Debt for the fiscal year is already over $600B as debt ceiling fight actually dragged last FY into this one. So if they keep that snow ball rolling it could be interesting.
    5 Mar, 07:38 AM Reply Like
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