Understanding the national debt with Brian Riedl

Brian Riedl is a Senior fellow at the Manhattan Institute and a member of MI’s Economics21, focusing on budget, tax, and economic policy. 

People are ignoring this story because they aren’t feeling the effects right now, they’re paying for it, but they don’t notice it. Right now, on average $2,000 a year of the average household taxes go to paying interest on the national debt. American’s should be upset because this number is going to increase, right now interest rates are low, but if interest rates normalize by the end of the decade it’s going to cost you about $5,000 in taxes and if interest rates increase more than that it could cost up to $8,000 in taxes. These low rates are going to end. You’re going to have higher debts and higher interest rates. 

Medicare is a lot bigger problem than social security, there are bigger deficits in that program and so taking it off the table to any degree just means we’re going to have to raise taxes more. 

American’s have allowed politicians to let us believe we can get government for free. For years we cut taxes, we increased spending and we just don’t pay for it or worry about it. And so, I think the politicians are being irresponsible to the next generation, but so are the voters because let’s face it, we want free things from the government and in a campaign, the politician who promises you free things will always defeat the politician who that we have to pay for it. 

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