As we head into a potential government shutdown this week and watch our political "leaders" flap their gums, it is worth putting some $'s behind the rhetoric. The current political argument has to do with the amount of "spending cuts" for this fiscal year. The Dems are pushing for $10 billion while the Repubs say they want about $50 billion.
So maybe we'll see a compromise after all the nonsense at around $30 billion. This battle will provide plenty of opportunity for media mavens to get plenty of air time. "Liberals" and " Conservatives" will be at each other's throats. The nonsense spewed by Matthews and Maddow on MSNBC will rival whatever the knuckleheads on FOX have to offer. It's great entertainment. We need something to replace March Madness.
Here's the thing , interest rates are outrageously low right now and in all probably will be heading northward sometime in the reasonable future. With almost zero interest rates, our interest expense this year is $400 billion. These idiot politicians are jerking our chains with "political arguments" about $20-$30 billion. An uptick in interest rates could add another $100 billion in interest expense easily... and that could be conservative estimate. So before we all get into the heated political back and forth just remember it's all theater. It's tantamount to the proverbial adjustment of the deck chairs on the Titanic. http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm