Interest Due on U.S. National Debt Starts to Explode

This past year is one that will be remembered for many things, but perhaps the one thing for which it may someday be best remembered is that it was the year in which the amount of interest that the U.S. government had to pay on its total public debt outstanding began to break all its previous records.

Visual evidence for that fact is shown in the following chart, which indicates the gross and net amounts of interest that the U.S. Treasury Department reports have been paid from 1997 through 2018 in each of its fiscal year-end Monthly Treasury Statements for these years.

Gross and Net Interest Paid on Treasury Debt Securities Issued by the U.S. Government, 1997-2018

At $521.5 billion in 2018, the total amount of interest paid on debt securities issued by the U.S. government to all its creditors exceeds the national GDP, adjusted for purchasing price parity, of 187 countries. If you want to look at just the net amount of interest that the U.S. government pays on its national debt, at $324.7 billion, that amount exceeds the national GDP of 173 countries.

For both measures, the current trend that led to the records for the amount of interest paid on the U.S. total public debt outstanding began after 2015, which is when the U.S. Federal Reserve began its recent series of interest rate hikes. The following chart from the Fed shows the history of how it has set those interest rates from 1997 through 2018.

Federal Reserve: Effective Federal Funds Rate, 1997-2018

Those interest rates combine with the growth of the size of the national debt, which has itself exploded over the last two decades, and especially so in the last 10 years. Near-zero interest rates kept the size of the U.S. government’s interest payments relatively flat over much of this time when the amount of its debt skyrocketed, but with interest rates now rising, having to pay the bill for having racked up so much debt is becoming painful.

U.S. Government Total Public Debt Outstanding, 1997-2018

According to the Wall Street Journal, the growth of the interest due on its national debt has put the U.S. government onto a course where it will soon spend more on its debt than it does on defense.

A bipartisan majority of politicians in Washington D.C. deny that any of this is a problem, where they argue that they can either increase taxes or borrow more to fund their desired level of spending without restraint. In truth, the lesson from many other countries around the world where they have tested this theory is that there are limits to how much they can do of either, which will mean that the government’s debt payments will come to crowd out a good portion of the spending they want.

That is when the truly painful part of having so much debt will take hold.


Craig Eyermann is a Research Fellow at the Independent Institute and the creator of the Government Cost Calculator at

Immigration-Policy Politics Is Local, Too

Tip O’Neill’s quip that all politics is local is often quoted. But is it really the case? If it is, why isn’t the leading issue in the immigration debate the anti-immigrationists’ assault on the rights of other native-born Americans and others lawfully living in the USA? These people, who apparently greatly outnumber the anti-immigrant zealots, have natural rights to hire immigrants, to rent them houses and apartments, to sell them goods and services, to welcome them into schools, churches, community organizations, and homes. With such overweening arrogance do the anti-immigrationists presume to deny others these rights.

This is a completely local matter, wholly apart from the harm caused to would-be immigrants when they are denied entry into the USA. Strange to say, the anti-immigrationists purport to occupy the high ground in the debate, constantly bemoaning the impositions on their rights that admission of the immigrants would allegedly entail. But they do not occupy the high ground merely by ignoring the manifold ways in which their policy preferences would trench on the rights of American citizens and other legal residents.


Robert Higgs is Senior Fellow in Political Economy at the Independent Institute, author or editor of over fourteen Independent books, and Editor at Large of Independent’s quarterly journal The Independent Review.

Demolished ACA was Demolition from the Start

Federal judge Reed O’Connor has ruled that the “individual mandate” of Obamacare is unconstitutional, and since that mandate is “essential to and inseverable from the remainder of the ACA,” that nixes the Act entirely. This comes six years after Chief Justice John Roberts cast the deciding vote to leave the ACA intact, but there’s a lot more going on here than O’Connor’s ruling and the appeals that will surely follow.

As we noted, health journalist Emily Bazar of the Center for Health Reporting tried her best to broker Covered California, the ACA’s biggest state subsidiary, for California consumers. They found a dysfunctional computer system, difficulties signing up and leaving the various plans, contradictions with the tax laws, pregnant women having their pre-natal checkups cancelled, and a lot more, including cronyism and massive waste. Bazar would up blaming the ACA for “widespread consumer misery,” hardly an endorsement of what was supposed to be a “signature” plan. For the namesake, the plan was doubtless more far reaching.

Days before the 2008 election, Obama claimed to be “fundamentally transforming” the nation, which was already a top-heavy welfare state from the days of the LBJ’s Great Society, and before that FDR’s New Deal. So the president had something else in mind. Under his ACA, you don’t get the health care you want, only the health care the government wants you to have. Contrary to what the president claimed, you couldn’t keep your doctor or your plan, and the rates were going to skyrocket. The ACA was a disaster from the start but its demolition of choice gave the president’s designated successor, Hillary Clinton, grounds to push for a “single-payer” health system, a euphemism for government monopoly health care. That doesn’t work very well either, but once in place you get only the care the government wants you to have. That’s the deal “social justice” crowd wants, in everything.

In a market oriented system, people choose the health care they believe best meets their needs. Will the incoming Congress team with the president to offer a system like that? At this point, one doubts that they will collaborate on anything.


K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and a columnist at The Daily Caller.

Promises, Promises: Financing President Trump’s Wall

In a recent meeting with Democratic Congressional leaders, President Trump threatened to shut down the federal government if they did not appropriate money to build “the wall” between Mexico and the United States. But when he was running for president, one of his campaign promises was that the Mexicans would pay for the wall. Why should we appropriate any money for the wall when the Mexicans are going to pay for it?

President Trump has an answer for this. He says the wall will be paid for indirectly by the Mexicans through the gains the United States will get as a result of renegotiating NAFTA, our trade treaty with Mexico and Canada. But the president’s argument makes no sense.

If we actually do benefit from a renegotiated NAFTA, those benefits will come regardless of whether the wall is built. So any benefits from a renegotiated trade deal will not be paying for the wall, even if, as President Trump conjectures, the benefits from the trade deal are greater than what he wants to spend on the wall. We could get the benefits of the trade deal without incurring the expense of the wall.

CPUC Touts Tax on Text Messages

Californians might want to look past the holidays and mark their calendars for January 10, 2019. That day the Federal Communications Commission meets in San Francisco and will consider a plan by the California Public Utilities Commission to tax consumers’ text messages. Jamie Court of Consumer Watchdog told reporters the text tax is “just political B.S.” Jamie Hastings of wireless industry representative CTIA went on record that a tax on texts is “bad for consumers.” Jim Wunderman of the Bay Area Council told Newsweek “It’s a dumb idea. This is how conversations take place in this day and age, and it’s almost like saying there should be a tax on the conversations we have.”

The CPUC budget has increased from $670 million in 2011 to $998 million in 2017, so the regulators are not short on revenue. The CPUC wants the text tax to fund programs that make cell phone service accessible to low-income individuals. Consumers might recall that in 2012 the CPUC approved a plan to give free cell phones to the homeless, but it’s not clear if owners of “free” cell phones would be subject to the new text tax.

The FCC claims it has no authority over texts, but there’s no telling what those federal regulators might do on January 10 in San Francisco. As noted in 2013, “the FCC has announced several changes to correct eligibility problems and made millions of additional Americans eligible for free government cell phones.” With largesse like that, nobody should rule out FCC approval of a tax on text messages.

Meanwhile, Californians might also mark their calendar for April 1, 2019. That day retailers outside of California will start collecting taxes on online purchases, even if they have no presence in the state. So no more bypassing California sales tax by shopping online. California’s sales and income taxes are the highest in the nation, and may soon be joined by a tax on texts. To paraphrase Spinal Tap, talkin’ bout taxes, my gov’s got ‘em.


K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and a columnist at The Daily Caller.

Federal Government Shutdown Theater 2018: The Drama Really Begins

To borrow a line from ABC’s reality shows The Bachelor and The Bachelorette, and with all due apologies to host Chris Harrison, this may be the most dramatic season of Federal Government Shutdown Theater ever!

According to The Hill‘s Jordan Fabian, the fireworks started on December 11, 2018, shortly after President Trump unexpectedly invited the cameras into his meeting with Rep. Nancy Pelosi and Sen. Chuck Schumer:

A Star is Born Lifted by Performances of Lady Gaga and Bradley Cooper

Several years ago, I asked a limo driver in Sydney, Australia which celebrity impressed him the most. Without hesitation, he volunteered Lady Gaga, who was then on her acclaimed Monster Ball Tour. Lady Gaga was reverential when she talked about her fans, and how important they were to her career. No other celebrity, he said, showed more authentic respect and appreciation for their fans. This humility and grounded authenticity may well be the touchstone for her compelling performance in A Star Is Born, earning her a well-deserved Golden Globe nomination for best actress (in a movie—drama).

Movie remakes tend to make eyes roll, but the newest “retelling” of A Star is Born is worth watching, and not just because of Lady Gaga’s performance. The movie earned five Golden Globe nominations and is a thoughtful, updated mix of themes from the previous versions. This version, co-written and produced by Bradley Cooper (Silver Linings Playbook, American Hustle, American Sniper) in his debut as a movie director, serves as a relevant reminder of the toll that substance abuse and addiction takes on human creativity, relationships, and identity. The fact that Lady Gaga and Cooper, who also plays the tarnished rock star Jackson Main, provide compelling performances allows this film to shine despite its flaws.

Whistleblowing in the Wind

Larry Wallace, a longtime aide to U.S. Senator Kamala Harris, has resigned but there’s plenty of backstory here to be told. Danielle Hartley, an assistant to Wallace in 2011, complained that Wallace harassed her and forced her to perform demeaning tasks. Hartley’s complaints to a supervisor brought only retaliation, so she filed a lawsuit. When the Sacramento Bee inquired about the $400,000 settlement, Wallace resigned and Harris claimed she knew nothing at all about the lawsuit, which just might be a stretch.

When Harris was district attorney of San Francisco, Wallace was her personal driver, quite the perk for a city DA. When Harris was elected state Attorney General, she brought on Wallace to oversee her security detail. After election to the U.S. Senate, Harris made Wallace a senior advisor in her Sacramento office. Yet, Harris, who led the charge against Supreme Court nominee Brett Kavanaugh, supposedly knew nothing about the harassment. As for Danielle Hartley, she got plenty of pushback beyond the job site.

Bohemian Rhapsody Shines When Queen Connects to Audiences

Bohemian Rhapsody just picked up two Golden Globe nominations, and its success is unlikely to stop there. Rami Malek (Night at the Museum films, Papillon 2017, Mr. Robot TV series), who plays rock icon Freddie Mercury, turns in a nomination-worthy performance, and the movie is strong with subtle themes not necessarily appreciated when it was released in the U.S. in early November. The movie, which scored a best film nomination as well, is really the story of how the band gave life and meaning to one of the 21st century’s most iconic rock performers and the role audiences played in keeping the band fresh and successful.

To be sure, Mercury’s awe-inspiring talent, charisma, and theatrics overshadowed Queen’s other three members. But director Bryan Singer (The Usual Suspects, X-MenValkyrie) and screenwriter Anthony McCarten (The Theory of EverythingDarkest Hour) have weaved together a complex tale on film that ensnares audiences in Mercury’s life while drawing out the group dynamic that made Queen so successful. More subtly, the movie represents an important nod to the virtues of commercial music, and the validation artists receive when they connect directly with their audiences.

Federal Government Shutdown Theater, 2018 Edition

Following the funeral of former President George H.W. Bush, politicians in Washington, D.C., returned to Capitol Hill to engage in what has become a different kind of ceremonial performance, one that’s become something of an annual tradition since passage of the 1974 Budget and Impoundment Control Act: federal government shutdown theater.

Stop me if you’ve heard how this goes before. Nearly every year, after politicians serving in the Congress are unable to come to an agreement on both how much money to spend and on what, they run into an artificial deadline that they set up many weeks earlier, after which, without a spending deal, the nonessential agencies that employ about 20 percent of federal government bureaucrats may be closed for business.

If they reach a deal before that artificial deadline, then nothing happens. If they don’t reach a deal, those agencies may be closed for up to one to three weeks until a “miraculous” compromise is reached that involves the federal government spending more money on more things. The furloughed bureaucrats go back to work, where they get fully paid for all the hours they didn’t work while being on furlough, with their “unscheduled” time off not counting against any of their generous vacation benefits.

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