NC State Economist Mike Walden – “Interest Rates and the Debt”

Mary:  This is Mary Walden with economist MW, welcoming you to the economic perspective.   Today’s program looks at interest rates and the debt.  Mike, there’s been some recent good news on the national debt.   The government is still borrowing money, but the size of the amount borrowed has been dropping.  Does that mean we can stop worrying – at least for a while – about the national debt?

Mike:  Summary Answer

  1. Three reasons for the good news
  2. With economic growth, federal revenues are growing faster – at about 8% annually, yet federal spending is rising only 2% annually
  3. Plus, interest rates are very low
  4. In fact, even with the build-up in debt in recent years, the percentage of the federal budget devoted to interest on the national debt has been cut by one-third
  5. But this means there are dangers
  6. Federal revenue growth will likely slow
  7. And, interest rates eventually will rise
  8. Then the debt issue will return
  9. I’m MW

Mary:  And I’m Mary Walden for the North Carolina Cooperative Extension Service

A native of the Texas Panhandle, Rhonda was born and raised on a cotton farm where she saw cotton farming evolve from ditch irrigation to center pivot irrigation and harvest trailers to modules. After graduating from Texas Tech University, she got her start in radio with KGNC News Talk 710 in Amarillo, Texas.