Can we rollover forever?

I have the real growth rate, percent change over the year. I also have the interest payments divided by the debt, giving the interest rate per year. When the blue line is above the red, we are not going to roll over the debt indefinitely.  Delong points to a Laurence Ball, Douglas W. Elmendorf, N. Gregory Mankiw paper from 1995 in which he posits that we can roll over indefinitely if growth exceeds interest payments. Well in 1995 we weren't doing so hot, interest payments exceeding growth by 4 points.  Things have gotten a little better, but DC is still a losing bet. Look at Clinton policy in 1995-2000. We were paying 6% yearly for money, including past debt rollover. Growth was 5%. Anyone who wants to repeat that task with over twice the debt/gdp ratio is going to raise taxes and cut expenses, sorry.

Here I plot the ten year rate (grean) and the aggregate interest rate over the total debt (blue).  The read line id debt to gdp ratio.  Congress generally pays the ten year rate over the total debt. The only way to accommodate 5% growth and pay debt costs is to bet long, very long.  I doubt anyone would believe Congress. The alternative is high, progressive taxes and extreme budget cuts, in other words, retrace the blunders of the past.

This chart is important, it is the interest expense as a percent of federal expenditures. To support a consistent 4% growth rate,  Congress will have to fill a whole of 11% in the budget. (Clinton did the same as you can see). That means taxes or disunion. That hole is equal to 2% of GDP.  Someone's taxes must go up faster than growth, any volunteers?

 The biggest losing president? The most ignorant jackass president who lost money hand over fist? Ronald Reagan, the alzheimer's president.