Taxpayers have a nasty surprise coming. More and more future tax dollars will go to pay off old bills and old promises the federal government made, but couldn’t pay.
The money borrowed by the federal government will result in a national debt of some $20 trillion by the end of this decade and taxpayers will have to pay almost $1 trillion a year, just in interest.
The chaos and danger of such a predicament is evident in Greece, which is so deep in debt - its economy is in chaos with national strikes, violent street protests and pensions on the verge of collapse - all because Greece owes so much money abroad. The country is now forced to beg for even more loans at higher interest rates just to stay afloat.
Some worry the U.S. is headed down the same dangerous path. Bob Greenstein of the liberal leaning Center on Budget and Policy Priorities says, "our economy is much stronger, our financial system is much stronger, but you know even if we experienced...a fraction of the problem of Greece's, it would really be a very painful experience for us."
"If you wait ‘till the crisis hits,” Greenstein continues, "then your options may be more constrained and you may have to take action that's more draconian and hits the average American in painful ways."
The U.S. is stronger, of course, but is headed down the same dangerous path. The Congressional Budget Office projects U.S. interest payments on our debt will quadruple over the next decade, becoming the largest single item in the budget.
Doug Holtz-Eakin, a former director of the Congressional Budget Office and campaign adviser to 2008 presidential nominee Sen. John McCain, R-Ariz., notes that in 2020, we'll be paying $916 billion in interest alone. "So we're really borrowing just to pay interest,” he says "we are steadily getting to the point where we're getting a new credit card just to pay off the old one."
Meaning the U.S. is flirting with the same predicament as Greece, forced to borrow huge sums of money just to pay the interest on money we've already borrowed and spent.
When a nation is in that deep, borrowing gets more expensive. Greenstein asks a key question: "Is there a point where foreign lenders become less willing to lend to us to cover our debts unless interest rates go up a lot?"
The answer is yes. Moody's, a credit rating agency, says most nations face credit downgrades once interest payments eat up more than 10 percent of total revenues.
Because the U.S. is stronger, Moody's says it wouldn't be downgraded until interest consumes more than 14 percent of revenues.
The problem is that President Obama's most recent budget plans cross that line in 2015, reaching almost 14.8 percent.
Holtz-Eakin says, "this is something that is dangerous by the lessons of history. The credit rating agencies have their metrics.”
And the Moody's report sounded even more ominous tones, saying nations that get into this bind, including the U.S., are flirting with danger. According to its chief author, Pierre Cailleteau, keeping the U.S.’ credit rating "will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion.” Cailleteau says, “the severity of the crisis will force governments to make painful choices that expose weaknesses in society."
But the U.S. is on track to go well beyond the line of Moody's warning. By 2020, interest payments will eat up 20 percent of federal revenues and they will keep climbing. By 2025, interest payments, combined with the cost of Social Security and Medicare for the baby boomers, along with other entitlements, will eat up every dollar of federal revenues.
Brian Riedl of the Heritage Foundation notes that "right now entitlement spending, primarily Social Security, Medicare and Medicaid - is nearly half the budget and it's growing seven and 8 percent a year." "Over the next 10 to 20 years it's going to swallow up the entire budget. There will be no money left for defense, education, highways, anything; because the entire federal budget will go to Social Security, Medicare and Medicaid," he adds. This, Reidl concludes, "simply is an unsustainable course."
At that point, the only options would be to raise taxes substantially, cut benefits for people already receiving them, or borrow a lot more and face the wrath of the creditors who will demand higher interest rates.
None of those actions would be to improve government or add any services, they would be necessary just to pay for promises already made and the money already spent that we borrowed and put on the national credit card.
Be sure to watch Tuesday's Special Report with Bret Baier at 6pm ET for more this story.
Find out exactly where your tax money is going - check out our taxpayer interactive calculator here, part of the It's All Your Money series on Fox News Channel.
Jim Angle currently serves as chief national correspondent for Fox News Channel (FNC). He joined FNC in 1996 as a senior White House correspondent.