32 • RUBY, WILDING & SWANSBURG
Why Low Interest Rates are Here to Stay For baby boomers like me, it’s likely interest rates will be lo w for the rest of our lifetimes. There are several reasons for this, but the primary one is that our government wants—and needs—lo w interes t rates . After all, low interest rates reduce the IRS’s debt payments. An increasingly large portion of our federal budget ea ch year goes t o paying interest ow ed on t he U.S. debt . In 2010, 6 per cent of our feder al bud get was dedicated to d ebt ser vice. By 2019, that number was up to 8.7 percent. 17 As this book is written, the federal government is borrowi ng and refund ing d ebt at ver y low interes t rates . If those rates rise , so does our natio nal de bt. Consider this: Between 2011 and 2013, the gross federal debt rose more th an $3 trillio n. If interes t rates had bee n jus t 1 perce nt higher during that time, the governme nt would have owed an additio nal $3 0 bi llio n in i nteres t e ach ye ar . In ear ly 2020 , the Congress ional Bud get Off ice issued a dire report on t he stat e of t he U.S. budget deficit . It project ed t2h0a1t 9, “wA ta s$ 1e q6 u. 8a lt rt iol l i7o9n ,pde er cbet nht eol df gbryo st sh ed opmu be lsi tci ca tp rt ho de uecnt d, f aorf greater th an the average de bt for the pas t fif ty years . C BO projects that, if current laws generally remain unchanged, th at de bt would increase to $31.4 trillio n, or 98 perce nt of 17 Drew Desilver. Pew Research Center. July 24, 2019. “Facts About the National Debt.” https://www.pewresearch.org/fact-tank/2019/07/24/facts-about-the- national-debt/
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