By Cara Newman, YOUNG MONEY Editor
23 November 2009

We all know the country is in big time debt. But believe it or not, it’s about to get worse. Treasury Officials borrowed a lot of money on short-term loans with low interest rates. Those short-term loans are about to come due.

According to the New York Times, “With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically.”

That would be an extra $500 billion per year—in interest.

For $500 billion, we could have another war, or two. Again, the NY Times says, “…an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.”

Think about that for just a minute. If you have ever used a credit card and missed a payment then you know how quickly interest can add up. Interest is money you are basically throwing away. Now, think about our government paying $700 billion in interest every year. Where is that money going to come from? What services and departments are going to get cut for us to pay for that?

Or, are we going to pay for that with our taxes? What will happen to all of the people retiring? For years experts have been telling us that Medicare and Social Security were going to start hurting the budget instead of helping it. But, did anyone plan ahead? Nope. And now the Baby Boomers are retiring—right in time to add to the problem of record deficits.

When you’re talking about this much money, even an increase of one percentage point “…would cost American taxpayers an extra $80 billion this year—about equal to the combined budgets of the Department of Energy and the Department of Education,” says the NY Times.

Right now, the White House is planning on borrowing $3.5 trillion more over the next three years and the Treasury has to refinance the short-term debt that was issued during the financial crisis. This means that about 36 percent, $1.6 trillion, of our country’s marketable debt is coming due in the next few months.

We’re in big trouble. Most people agree that we had to spend to get out of our financial crisis, but now we need to stop spending money. We have nearly doubled our debt in the last two years alone.

Read the full New York Times article.

What do we do? How do we get back on our feet and make things right? Tell us what you think.