The amount Treasury pays on existing debt or the posted rate plus taxes. It has been close to the growth rate since Obama until 2015. Now would be a good time for Treasury to buy back debt. Truman called the natural Swamp rate at 2.1%.
We have some economists claiming the real rate to be much lower. The real rate is inherent in the structure. It is the total cost of government imbalance. We are making bets over the election cycle, as we expect periodic changes in taxes and spending. Two percent is the insurance cost.
One way or the other the consumer insures government bonds with 2% of income. But we can make government more benign, less prone to sudden stops. The 2% used more effectively with revenue sharing.
Most of the debt we accumulate comes from bailing our shortages in the government chain, caused mostly by bad politics. The idea of revenue sharing is to price bad politics.
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