With the national debt now topping $12 trillion, the White House estimates that the government?s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Indeed, the government paid less interest on its debt this year than in 2008, even though it added almost $2 trillion in debt. Rowe Price, estimated that the Treasury?s tab for debt service this year would have been $221 billion higher if it had faced the same interest rates as it did last year. Wall Street firms advising the Treasury recently estimated that the Fed?s purchases of Treasury bonds and mortgage-backed securities pushed down long-term interest rates by about one-half of a percentage point. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. read more

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