Now we are dealing with a mathematical function called “compound interest“.  The U.S. dollar is a un-backed fiat currency that used to be a contract for 1/20th an ounce of gold but that is no more.  So when we have treasuries that come due at maturity, we issue/print dollars to make good on the principal and interest or we issue more treasuries that will come due in the future again.  Over time this creates more money that is not keeping up with the amount of taxes we produce as a society or the exports we send abroad to settle with our trade partners.  Not to mention is creates price inflation because we are bringing in dollars faster that the economy can grow the put those extra dollars to work.

What is happening is we are slowing creating a situation where will not be able to “ever” pay back the debt unless we raise taxes through the roof and if we actually let the debt increase to $27 trillion dollars, that would actually eat up the entire U.S. GDP ($14 trillion).  CNN did a nice piece and if you look at the chart the produce that projects the increase in interest cost from now until 2019, it is a steady increasing line that looking just like a compounding rate of interest, which is actually happens to be and reinforces what I said above.

Here’s a new way to think about the U.S. government’s epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.

More than half. In fact, $4.8 trillion.  If that’s hard to grasp, here’s another way to look at why that’s a problem.

In 2015 alone, the estimated interest due – $533 billion – is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a deficit watchdog group.

On the bright side – such as it is – the record levels of debt issued lately have paid for stimulus and other rescue programs that prevented the economy from falling off a cliff. And the money was borrowed at very low rates.

But accumulating any more interest on what the United States owes at this point is like extreme sport: dangerous.

Analysis: We are  coming to point where we are going to have a serious currency crisis and our current leaders seem to not being doing anything to prevent is and actually we are doing things that are making it worse.  Dollars savers are being punished so right now you are forced to speculate on other and more risky assets.