A simple measure of the distributional burden of debt accumulation

AEI economists Aspen Gorry and Matthew (Matt) Jensen calculate the expected cost to households of different income levels to service the interest on America’s debt in a new paper.

  • Whose debt?: The authors study current levels of government debt, the debt accumulated by recent presidents, and the burden of future debt projected to accumulate under current law, current policy, and the Administration’s budget.
  • Who pays for existing debt?: If interest costs are financed in line with the progressivity of the federal tax system under current policy, a household with annual earnings between $50,000-75,000 would pay $1390.49 a year to service the current debt.
  • Who pays for future debt projected to accumulate through 2022?: Under current law, the Administration’s budget, and current policy, if interest costs are financed with federal taxes a household earning $50,000-75,000 would pay an additional:

 

  • Current law: $390
  • Administration’s budget: $880
  • Current policy: $1350

Read the full paper here

Aspen Gorry ([email protected]) is a research fellow at the American Enterprise Institute, where Matt Jensen ([email protected]) is a research associate in economic policy studies.

For additional help, other media inquiries, or to reserve AEI's in-house TV studio or ISDN facilities, please contact:

TV or Radio Jesse Blumenthal [email protected] / 202.862.4870

Print or Web Jesse Blumenthal [email protected] / 202.862.4870 or Veronique Rodman at [email protected] / 202.862.4871

Follow @AEInews

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Aspen
Gorry

 

Matthew H.
Jensen

What's new on AEI

How the Common Core went wrong
image Election countdown: The mood, measurements, and mechanics
image Rubio's defense speech: Fearless, informed, and refreshing
image Sorry Kerry, there is little role for Iran in fighting ISIS
AEI on Facebook
Events Calendar
  • 22
    MON
  • 23
    TUE
  • 24
    WED
  • 25
    THU
  • 26
    FRI
Monday, September 22, 2014 | 2:30 p.m. – 4:00 p.m.
Policy implications of the new US labor market normal

We welcome you to join us as a panel of economists discuss US wage and price prospects in the coming months and the implications for the Federal Reserve’s current unorthodox monetary policy.

Friday, September 26, 2014 | 8:30 a.m. – 9:00 a.m.
#ModiInUS: Can Modi’s visit to the White House put US-India relations back on track?

Tune in for this Google Hangout discussion with three leading experts about the implications of the Obama-Modi summit. Tweet your questions and comments to @AEI with #ModiInUS.

No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.