Europe’s knee jerk reaction to the Russian invasion was ill-thought out. The sanctions backfired. The unintended consequences of declaring economic war on Russia will cause a global political realignment and possible end of the dollar as the world’s reserve currency.
In the meantime, we have become stuck in another endless war that will cost many billions of dollars that we must borrow adding to our 31 trillion dollar national debt. And with the Fed raising interest rates, our debt servicing costs will continue to increase taking money away from other priorities.
In late May, the Congressional Budget Office (CBO) projected that annual net interest costs would total $399 billion in 2022 and nearly triple over the upcoming decade, soaring from $442 billion to $1.2 trillion and summing to $8.1 trillion over that period. However, if inflation is higher than CBO’s projections and if the Fed raises interest rates by larger amounts than the agency projected, such costs may rise even faster than anticipated.
The growth in interest costs presents a significant challenge in the long-term as well. According to CBO’s projections, interest payments would total around $66 trillion over the next 30 years and would take up nearly 40 percent of all federal revenues by 2052. Interest costs would also become the largest “program” over the next few decades — surpassing defense spending in 2029, Medicare in 2046, and Social Security in 2049.
Ballooning interest costs threaten to crowd out important public investments that can fuel economic growth in the future. CBO estimates that by 2052, interest costs are projected to be nearly three times what the federal government has historically spent on R&D, nondefense infrastructure, and education, combined.
The sanctions are half baked and full of loopholes. We can thank the EU and Brandon for that. President Trump had effective sanctions on Russia and they were removed by Biden.
I’m quite surprised you think Russian corruption and influence in Europe is in the strategic interest of the US. President Trump certainly disagrees with that and so do I. Kicking Russia out of Europe will bring tremendous economic benefit to the US and that makes any support to Ukraine now a good investment.