The US economy is under heavy pressure as mounting US debt metrics have ballooned rigorously to a new level. The new metrics present a new picture, with interest expense on US debt surging to a staggering $3 billion daily.
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US Debt Interest Expense Breaks Records
According to the Kobeissi Letter, interest on US expense debt has surged to $3 billion daily. The metric has reportedly tripled in the last ten years, adding more pressure to the US economic strata.
“This is insane: Interest expense on US federal debt is now at a record $3 billion per day. This is triple the amount paid 10 years ago and has doubled in just 2.5 years.”
The platform further shared how the total annual cost of federal debt peaked and reached $1.1 trillion in Q2 2024. With the Federal Reserve contemplating cutting rates this month, daily interest expense is set to maintain the $2.5 billion level, which is highly concerning for the US economic structure.
“This is triple the amount paid 10 years ago and has doubled in just 2.5 years. Total annual interest costs on federal debt reached a whopping $1.1 trillion in Q2 2024. Even if the Fed cuts rates by 1% and all government bond yields decline by 1%, daily interest expense will still be $2.5 billion. That would be more than double the average paid in 2009-2019. The debt crisis is an understatement.”
The inflating debt metrics have also caught the attention of Tesla chief Elon Musk. Musk took to X to share an update on the deepening debt crisis in the United States. The Tesla CEO outlined how the debt interest has exploded and is now exceeding the budget of the entire defence ministry.
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Small Businesses in the US Are Dying A Slow Death
In the US entrepreneurial domain, small businesses are struggling to sustain their operations. According to recent statistics uploaded by the Kobeissi Letter, 37% of small companies have noted a sharp decline in their earnings in the last three months.
The platform shared how, over the last three years, small businesses in the US have been dying and slowing their operations as high labour and material costs have become increasingly difficult to afford.
“BREAKING: 37% of US small businesses have seen their earnings drop over the last 3 months, the highest share in 14 years. This is even weaker than the 35% seen during the 2020 pandemic. Over the last 3 years, small business earnings have declined in a near straight-line lower. Increased labor and material costs and deteriorating sales volumes have been the primary drivers of this. Recently, small business sales expectations fell to their second-lowest level in 4 years. Small businesses are struggling as if the economy is in a recession.”
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