Would You Lend Money To Someone Like This?

Would you lend money to a deadbeat relative who needs the money just to pay the interest on his credit card, not even the principal? I would argue that this is a bad loan to make. Well, the United States' Treasury now needs 40% of the income tax revenue it brings in just to pay the interest on our national debt. And Barack Obama, not understanding things like basic economics, wants to double our debt as a % of GDP. If you double the size of the debt and do it by borrowing at higher and higher rates, then this percentage of taxes needed to service the debt will move vertiginously higher in short order. There is a term for when a country borrows money just to pay the interest on previously borrowed money. It is called a "Ponzi Scheme." We have become an unserious country.

From the WSJ:

As of Sept. 30, 2009, the national debt was almost $12 trillion and interest on that debt was $383 billion for the year, according to the Treasury Department's Bureau of the Public Debt. The Congressional Budget Office on Oct. 7 estimated the 2009 budget deficit to be almost $1.4 trillion (about 10% of GDP). In August, the White House Office of Management and Budget (OMB) estimated total government revenues at about $2 trillion. The revenue estimate included $904 billion from individual income taxes. This means the cost of interest on the debt represented more than 40 cents of every dollar that came in from individual income taxes.