The Congressional Budget Office projects that interest will be $233 billion this year, or 1.3% as a share of the economy.
By 2024, it will reach $880 billion, or 3.3% of GDP. That means interest will account for the lion’s share of the $1.1 trillion deficit projected for that year and will come close to what will be spent on Medicare.
Interest costs will jump for two reasons. The first is the improving economy, which is expected to push what have been historically low interest rates to higher, more typical levels.
The second reason is that the underlying debt will remain very large and continue to grow.
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