Following up on a recent blog post by my colleague Matt on interest expense, I wanted to point out yesterday's report by the Treasury that the government's net interest payments on the national debt reached $226.6 billion in FY 2006, an increase of 23 percent over FY 2005. (See the Monthly Treasury Statement, Table 9.)

They must think we're not paying attention. Have a look at this statement, from an editorial in the Washington Post:

To follow up on Matt's discussion below of the final deficit figures for FY2006, I thought I'd point to some of the wildly disparate explanations offered for it. Says Speaker Hastert, whose credibility right now is not exactly at an all-time high: "Republicans have cut the deficit in half three years ahead of schedule because they know that tax relief fuels America's economy." President Bush added a corollary last night: "Do we keep taxes low so we can keep this economy growing, or do we let the Democrats in Washington raise taxes and hurt the economic vitality of this country?"

The final CBO FY 2006 deficit estimate numbs are in … at a cool quarter of a trillion dollars. The $250 billion figure released today is well under CBO’s estimate of $337 billion at the beginning of the year and the $318 billion actual deficit for FY2005. Until this summer, the deficit projections were uniformly in the $300 billion-range, but a late surge in corporate income helped boost FY2006 revenues by $253 billion over last year’s total.