US Government Debt Different - Finance Department - University of ...

158Burning the Furniture to Heat the House – The Potential Role of Asset Sales in Funding the Federal Government’s DeficitsFigure 5: U.S. Debt Service CostsSources: Office of Management and Budget, President’s Budget for FY2013, Historical Tables; Treasury.Notes: Average interest rate on total interest-bearing debtTable 1: Interest Rate SensitivitySources: Office of Management and Budget, President’s Budget for FY2013, Historical Tables; Treasury.Notes: Sensitivity calculations use debt service, total outlays, and GDP for 2011.Options for Skinning the Debt CatBefore any of these scenarios come to pass, policymakers must tossthe mantle of Hamlet aside and act to reduce our ongoing deficitsand put the federal government’s finances back on a sustainable path.There are six basic options to skin the debt cat, and only two are viablewithout significant economic dislocation in the transition. The