Effective Interest Rates: But Cost of Debt Unlikely to Continue to Decline
For Extended Period If Economy Improves
USA Federal Debt Weighted Average Yields, 1980 — 2010
30-Year Average Yield
Weighted Average Treasury Yields (%)
0% . T T T T T T T T T T 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
KP Source: US Treasury. i USA Inc. | Income Statement Drilldown 165
Effective Interest Rates: If Debt Levels & Interest Rates Rise Dramatically
Beyond 2010, Net Interest Payments Could Soar...
USA Federal Net Debt Outstanding / Effective Interest Rates / Net Interest Payments, 2009 — 2016E
11-16E 2009 2010 2011E 2012E 2013E 2014E 2015E 2016E CAGR Net Debt Outstanding ($B) $7,545 $9,019 $10,856 $11,881 $12,784 $13,562 $14,301 $15,064 7% Y/Y Growth 30% 20% 20% 9% 8% 6% 5% 5% Effective Interest Rate (%) 2.5% 2.2% 1.9% 2.0% 2.5% 3.1% 3.5% 3.7% -
Net Interest Payments ($B)
Y/Y Growth % of Federal Tax Receipts
KP Note: CAGR is compound annual growth rate. Source: White House Office of Management and Budget. (@E) www.kpcb.com USA Inc. | Income Statement Drilldown 166
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