$1 trillion in interest per year by 2021

Here is a thought:  If the national debt rises to $25 trillion, and interest rates on that jump to 4%, then the annual bill for interest will be $1 trillion.  And this could occur as soon as 2021.

Read this:

We are now ramping up government debt by orders of magnitude at the same time when interest on our mountains of debt will easily rise to 4% in about two years. I come by that number partly from the present rate of interest rise but mostly from the fact that the Fed is moving out of controlling the cost of debt, and will be doing so at a faster rate in the months ahead. (That is, if it stays with the program it has promised; and if it doesn’t, we simply have QE forever.) Mostly I come to it because 4% is the low side of what interest on the debt has historically been when the Fed wasn’t sopping up all government bonds, bills, and notes.

A rise to the low side of normal for government bond interest will likely put interest payments alone on the national debt at a $1 trillion a year by the end of this decade (because the debt will also rise by another $3-4 trillion by then with all new debt being financed at the higher rates and all rolled-over debt being financed at those rates, and most of the US debt is short term, so will roll over soon).

The time (end of 2020), then, is not far off when the entire newly normal trillion-dollar deficit will be consumed just to pay interest on the debt. Whether inflation drives interest up or the Federal Reserve’s unwind or the Republican’s new normal of trillion-dollar annual deficits or the president’s proposed fiscal stimulus plan, the concern that is shaking markets is ALL about lethal levels of interest coming to our already monumental mountains of debt.

From http://thegreatrecession.info/blog/fed-up-on-peak-debt/

My comment:  When this happens we will just up the deficit to $2 trillion per year.  Why not?  We just established that the government is the source of all wealth and its ability to create wealth is unlimited, so everybody will get richer.  And why stop at $2 trillion, why not $3 trillion.  That would be enough to give everyone a Universal Basic Income.  And then there would have to be cost-of-living-adjustments on the monthly non-welfare checks everyone would receive.