How much in interest payments since 2002 has the increase in the debt past the old debt ceiling cost the US?

Question

Wikipedia notes several recent changes to the debt ceiling. Increases in the debt ceiling allow the Treasury to borrow more money and increase the national debt to a level higher than previously allowed by law.

August 5, 1997 5,950 +450 Pub.L. 105–33
June 11, 2002 6,400 [26] +450 Pub.L. 107–199
May 27, 2003 7,384 +984 Pub.L. 108–24
November 16, 2004 8,184 [26] +800 Pub.L. 108–415
March 20, 2006 8,965 [27] +781 Pub.L. 109–182 
September 29, 2007 9,815 +850 Pub.L. 110–91 
June 5, 2008 10,615 +800 Pub.L. 110–289
October 3, 2008 11,315 [28] +700 Pub.L. 110–343
February 17, 2009 12,104 [29] +789 Pub.L. 111–5 
December 24, 2009 12,394 +290 Pub.L. 111–123 
February 12, 2010 14,294 +1,900 Pub.L. 111–139 
January 30, 2012 16,394 +2,100
May 19, 2013 16,700

How much in interest payments since 2002, has the increase in borrowing from the previous debt ceiling of $5,950 billion to the new debt ceiling of $16,700 billion, cost the US?

Note: Only count additional interest payments on the debt from 2002-present due to the increased borrowing limit authorized by Congress, not all interest payments since 2002.

Answer 1

Changes in the debt ceiling have no direct effect on the amount of interest paid. Only when the permissions granted by the debt ceiling are utilized to create actual debt does interest become payable. Therefore we will estimate the increase in interest payments since 2002 due to increases in the amount of borrowing.

Changes in interest paid depends on two things - changes in interest rates and changes in amount borrowed. We will try to factor out the first by considering the fraction of the debt for any year that is above the 2002 level. it is assumed that the same fraction of the interest paid is due to the debt level above the 2002 level. Dollar amounts are in billions.

Year   Debt   % above 2002     interest     due to post-2002 debt
2002   $6,228       0%           $332               $0
2003   $6,783       8%           $318              $25
2004   $7,379      15%           $321              $48
2005   $7,933      21%           $352              $74
2006   $8,507      27%           $405             $109
2007   $9,008      31%           $429             $133
2008  $10,025      39%           $451             $175
2009  $11,910      48%           $383             $184
2010  $13,562      54%           $414             $224

I'll leave adding up the final column as an exercise for the reader.

A fairly large factor we have had to leave out is inflation (which reduces the impact of the interest and the debt) . We also have not cross-referenced this with GDP changes, or with increases in government income. Both generally increase the governments ability to pay interest on the debt.

NOTES

1. Debt figures are from Wikipedia.
2. Interest figures are from the Treasury

Answer 2

I took the figures referenced by DJClayworth and updated up to 2014 numbers and included inflation.

Year	Debt	% above 2002	interest	due to post-2002 debt	Cumulative Inflation	Adj Debt	Adj % above 2002	Adj Interest	Adj due to post-2002
2002	$6,228	0%	$332	$0	-	-	-	-	-
2003	$6,783	8%	$318	$26	2.3%	$6,627	6%	$311	$19
2004	$7,379	16%	$321	$50	5.0%	$7,010	11%	$305	$34
2005	$7,933	21%	$352	$76	8.6%	$7,251	14%	$322	$45
2006	$8,507	27%	$405	$108	12.1%	$7,478	17%	$356	$59
2007	$9,008	31%	$429	$132	15.3%	$7,630	18%	$363	$67
2008	$10,025	38%	$451	$171	19.7%	$8,050	23%	$362	$82
2009	$11,910	48%	$383	$183	19.3%	$9,611	35%	$309	$109
2010	$13,562	54%	$414	$224	21.2%	$10,687	42%	$326	$136
2011	$14,781	58%	$454	$263	25.0%	$11,086	44%	$341	$149
2012	$16,059	61%	$359	$220	27.6%	$11,627	46%	$260	$121
2013	$16,732	63%	$415	$261	29.5%	$11,796	47%	$293	$138
2014	$17,810	65%	$430	$280	31.6%	$12,182	49%	$294	$144

In actual dollar terms the US has paid a cumulative $1,993B in interest for solely post-2002 debt. Adjusted for inflation this number is $1,103B.

Also adjusted for inflation, however, the interest the US pays on its debt has actually dropped 11% since 2002 unless I botched the math.

I would be eager to see someone take change in GDP/government revenue over this time period to see, adjusted for inflation, what % of the budget goes to interest now as opposed to 2002.

Debt source

Interest source

Inflation source

Answer 3

It could be argued that it didn't cost anything between 2002 and 2022, because the ratio of interest payments to GDP has been continuously lower during that time compared to the first quarter of 2002:

With interest rates going up and the government continuing to increase the debt ceiling things are likely to change, but so far the interest payments have been sustainable. The Congressional Budget Office projects that things will become much worse within this decade:

Answer 4

First, it's about the actual debt not the debt ceiling and second as a frame challenge to the "cost the US" phrase, you'll have to take into account positive effects from increased borrowing (a higher tax base for example) and inflation in order to determine effective costs to the US. It's not like the US government took money and simply burned it or threw it away. Instead there will have been a positive contribution to economic growth from the increased spending as well.

It may well be that any cumulative influence from increased borrowing on government finances has been actually positive not negative. See for example the famous work of Keynes that strongly advises taking on new debt in certain situations (probably because it fiscally is a better solution). On the other hand increased debt can also increase interest rates which would even affect existing debt, not only new debt. Additionally, inflation reduces the effective borrowing rate making it negative sometimes. A dollar in 2002 and one in 2022 is simply not the same (even though they have the same name) so adding them up means adding up different things. Higher numbers over time are expected from inflation alone even though they don't mean higher costs. In any case an accurate analysis of the long term costs of deficit spending vs. increasing taxes or spending cuts will be quite complex.

It will also depend on the specific circumstances with positive contributions (negative effective costs) in some circumstances in negative ones in others. There is no simple general answer unless you are only interested in some accounting aspects like interest paid without others like taxes collected or the model behind all of these. For example negative effective central bank interest rates aren't unheard of.