Interest on US debt

AGA7d

http://money.cnn.com/2009/11/19/ ... _interest/index.htm

Last Updated: November 19, 2009: 1:05 PM ET

NEW YORK (CNNMoney.com) -- Here's a new way to think about the U.S. government's epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.

More than half. In fact, $4.8 trillion.

If that's hard to grasp, here's another way to look at why that's a problem.

In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a deficit watchdog group.

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The good news is that U.S. can set a low interest rate to ease the pain. In fact, the gov deficit in 2009 was reduced by some (compared to 2008) because of the lower interest rate. The bad news, of course, is that how long can U.S. continue to set the rate? Should lenders demand higher rate if you have more debt and are more likely to default year by year?