Wave of Debt Payments Facing U.S. Government

[groovedaddy]

WASHINGTON — The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true. But that happy situation, aided by ultralow interest rates, may not last much longer.

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

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. Other forecasters say the figure could be much higher.

In concrete terms, 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.

http://www.nytimes.com/2009/11/23/business/23rates.html?th&emc=th
http://www.nytimes.com/2009/11/23/business/23rates.html?_r=1&th&emc=th

[grasswire]

1. ????????????????????

"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. Other forecasters say the figure could be much higher.

In concrete terms, 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."

Is this some kind of bomb that George W. left Obama?

Why is this not being discussed on the news shows? Oh wait, I guess that wouldn't be cool during the holiday season for retailers.

[groovedaddy]

2. I would think the answer to your question is: YES. Is this how they destroy the Federal

government? Okay, maybe not outright destory it, just hamstring the hell out of it.

[AtheistCrusader]

3. 'starving the beast'?

I like how the Republicans whip out PayGo and other 'spending caps' the moment they leave power, but while they have the White House, Senate, and House, all they can find is the Government Credit Card, and an itch to use it.

'Change' comes to town, when the voters get wise, but the 'change' is stuck figuring out how to pay for the misdeeds of the previous administration. Instead of doing the things we were looking for during the election.


In a small, mean way, I wish McCain had won, so a republican would be holding the bag when all this republican bullshit spending came due. It would suck, but then maybe, MAYBE no one would ever trust that fucked-up party ever again.

[notesdev]

5. It's the result of bailouts and other overspending

Both parties own this. All these bailout and 'stimulus' programs were passed by Nancy Pelosi's House. As the gatekeeper of the national wallet, that chamber is primarily responsible for our fiscal situation.

[phasma ex machina]

10. +1 The House absolutely controls all spending (lots of luck with getting that message out). nt

[4_TN_TITANS]

9. "Is this some kind of bomb"

We were warned about this by the DU financial wizards long before Obama even won a primary. A little gift to the incoming Dem prez, compliments of Bush/Rove, that would implode after the statute of blame was expired.

[tridim]

4. There's a pattern and it's being ignored.

Republicans fuck up the country and the Democrats get the blame. Rinse, lather, repeat.. Decade after decade.

[groovedaddy]

6. The "joys" of the two party system. ;-) n.t

[fasttense]

7. But, but, but Raygun proved deficits don't matter. So, why do they suddenly matter now?

BS from BS artists. If we work on the debt then the economy is sure to crash again and unemployment will continue to rise. Which is exactly what the Republicons want. And President Obama is following the deficit hawks' lead.

Deficit can not matter when the economy in effect has a 21% unemployment rate (the real unemployment rate if you took out all those adjustments to the employment numbers each President since Raygun put in). If we kept records like they did when the unemployment rate was 1st put in, but include women, it would be almost double what is currently reported.

When FDR tried to balance the budget, the economy dipped back into a depression. The same thing will happen.

But I guess it's much more important that the numbers look good then to help people keep their homes and to keep people from going hungry.

[dixiegrrrrl]

8. Bush and Congress get the blame for cutting the investment taxes

thru 2010.
Zero and/or very small taxes on dividends and capital gains, which made the stolen money that
was invested pay off even bigger.
Nice law for some of us little people who could cash in retirement investments, but the law was
really written for the thieves in the big investment funds, banks.
Low investment taxes, low income taxes, guarenteed recipe for disaster down the road.
We are AT "down the road" now.

[notesdev]

12. They matter now

because unlike then, we don't anymore make anything here to back the money we're printing.

Then we were making promises (if foolish ones) against production.

Now we are making promises against bullshit.

What happens when China decides it wants to cut its losses?

[roamer65]

11. Debt monetization.

The Fed will simply convert the bonds to cash.

[704wipes]

13. and that means

inflation ? right?