Morris Beschloss

Special to The Desert Sun

While the current Treasury budget agreement guaranteed the financial excesses needed to fund the unvarnished government agencies' status quo, it also assured that the path to a $20 trillion Treasury debt, long before 2020, is assured.

While Speaker Paul Ryan's directed compromise avoided a major government shutdown and further political party "sequestration" arguments for the rest of the fiscal year ending October 1, and forced the President to lift the lid off the 1974 Nixon oil embargo, it sets up America's future economy for an unprecedented cost factor, This will be increasingly squeezing out badly needed expenditures for military preparedness, infrastructural upgrading, and support for independent business growth opportunities through an updated, balanced federal tax system.

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Simple mathematics make clear the that the U.S. Treasury debt service will become so ponderous as to make this expenditure large enough to compete with U.S. Defense sector funding as the number one government expenditure in the foreseeable future. Up to this point, the U.S. has been able to avoid overwhelming debt service due to the following factors:

The low interest rates needed to successfully float and service the nation's steady debt increase have hovered in the low single digits. But this trend is sure to increase in the foreseeable future. It's frightening to imagine that the amount forked over to U.S. Treasury debt holders, at the double digit interest rates of the "Carter years" (1977-81), could prevail on the forthcoming $20 trillion Treasury debt facing the U.S. during the initial term of the next President.

Back in the Carter Administration, the Treasury debt had not even reached $5 trillion. That number was doubled, prior to the turn into the new millennium. The $10 trillion dollar debt level was reached before two-term President George W. Bush left office in January, 2009.

While the succeeding Obama Presidency will leave us with a near $19 trillion debt, such interest service expenditures have had the benefit of a long stretch of unusually low interest rates, with an average payment of low single digit payouts to keep debt service within rational bounds.

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However this sanguine period of funding such massive debt increases is on the verge of ending. Despite a less than dynamic economic growth in the years ahead, it's a near certainty that the forthcoming $20 trillion Treasury debt could face an average service payout exceeding that of all other Federal government segment payouts.

And no letup in the 100% repayment record of the U.S. Treasury could ever be contemplated; since the sterling U.S. worldwide credit reputation has resulted in purchases of one-third of the total U.S. Treasury debt by foreign governments and private interests.

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