We've just added $3.6 trillion in debt. [View all]

[dkf]

Tim Kane: “The fiscal cliff metaphor is overrated, but the long-term fiscal crisis is not. The cost of the ATRA bill, according to the CBO, is an additional $3.6 trillion in debt over ten years. The nation sits atop a mountain of unstable debt dynamite, and every year more is added to the mountain. A trillion dollars per year, funding principally by artificially low interest rates due to monetizing by the Fed.”
“Maybe Obama thinks the Fed is his ultimate ace card. But when the crisis comes, when the bond market hesitates to buy new T bills with vigor, the President and the nation will be caught empty-handed.”

Bill McBride is more optimistic: “We still don’t know the details of the sequester, but I expect the deficit to be close to 5.5% of GDP this year. Still high, but improving. Unfortunately there are some longer term issues, especially with health care, but in the short term the deficit is moving in the right direction – and will decline further as the economy improves.”

http://wonkwire.com/2013/01/03/we-still-have-a-long-term-debt-problem/?utm_source=twitterfeed&utm_medium=twitter