Hidden debt bomb in the Federal Budget.

This is what happens if interest rates go back to 2007 levels.  Issued treasuries has tripled in 9 years.

Mnuchin's comment about not caring about the dollar strength and knowing that a weak dollar will likely trigger a surge in inflation and interest rates, triggered me to do a thought experiment on what if US Treasury rates go back to 2007 levels. In 2007 the effective interest rate on the debt was 8.7%. It is interesting to note that interest on the debt in 2007 is about equal to the interest on the debt in 2017, even though Treasuries issued has nearly tripled.

In 2007 $5 trillion in Treasuries were issued, now almost $15 trillion have been issued. If interest rates were to go up to 2007 levels, interest on the debt would be $1.2 trillion from a measly $460 billion now, blowing up federal spending by 25%.

This here is the bubble/boogeyman nobody wants to talk about. It's especially scary since we are on pace to issue about $1 trillion in new debt in 2018, and possibly that much and more every year there after for the foreseeable future.

If you ever want to discuss where the money goes, and where to cut for the biggest affect. These charts will come in handy. I tried to make the actual 2017 pie a little smaller than the what if 2017 chart to emphasize the blow up in total spending.