Skip to comments.Soon There Won't Be Enough Money in the World to Fund US Debt
Posted on 11/19/2012 1:36:14 PM PST by libertarian neocon
I just started reading After America by Mark Steyn which I highly recommend to anyone. It is probably the most humorous book on the economic apocalypse you'll ever read. Anyway, Mark Steyn refers to a paper called "Financing US Debt: Is There Enough Money in the World - and At What Cost?" by US Treasury official (and former Chief Economist of the Office of Management & Budget) John Kitchen and Menzie Chinn of the Robert M. La Follete School of Public Affairs at the University of Wisconsin. Using estimates from the CBO, they calculate how much US Treasury debt foreign governments will have to buy over the coming years to keep funding our government at current interest rates. The results are simply not pretty. It is becoming increasingly evident that the US debt is just so enormous that we will eventually not have enough people around to actually buy our debt from us. Check out this key chart:
Well, if they can’t print it, I suppose they could just add a few zeros onto the EBT transfer cards. Computuer programs that are running on tetrabytes will just have to make a few more zeros. No one is fooling anyone, we just know the value of a zero.
There ALREADY isn’t enough money in the world to fund US Debt. The Federal Reserve has to buy (ie. print) 70+% of US Debt issuance now.
try to imagine where interest rates would go if the FED did not buy US Debt.
That is why the Federal Reserve is the first and most important pillar of Progressive plans for Government. No FED means no money printing, which means the Gov’t must pay real interest rates on debt, which means Gov’t spending would be eventually be checked by the market, which means the Gov’t would not be able to run massive, long-term deficits as they are now, which means they can’t fund the welfare state.
We should round up every single idiot that voted for obama and have them arrested!!!!! They are just as responsible for this debt as obama!!!!
He promised to foundationaly change America.
You can ALWAYS print more.
Prices will be adjusted accordingly.
Maybe Zero can get his mug on the new 100,000 dollar bill? You know the one you will need for a loaf of wonder bread..
They even banned 100 watt lightbulbs are are forcing us to buy mercury laden curly bulbs , banned big sodas, and a million other freedom robbing laws. They banned light bulbs because of decades of fake government funded research on the hoax called global warming. this alone proves socialism doesn't work that they have funded trillions of $ of global warming research. Oh so we now see there is no global warming so they rename it to climate change.
This country became great because it was the freest and had the most limited government.
A vote for democrats is a vote for tyranny, slavery, and economic failure.
Round um up and put um to work! They have a huge tab to pay off. My kids sure as he77 don’t want to pay it off for um!
“try to imagine where interest rates would go if the FED did not buy US Debt.”
No need to imagine it. It’s happening. Gold will skyrocket, the economy will flatline, inflation will eat us and the housing market (most common source of wealth for the middle class) will stay underwater until interest rates are forced up...then we will have what is already what we have if there were rational thinking...a double dip.
Nonsense. Just print up a butt-load of these...
Of course there will be “enough money”!
Bernanke can pull up the necessary app on his workstation, and create as much ‘money’ as he wants to. Now, if the ‘money’ had to be converted to hard cash for any reason, that could be a problem as there wouldn’t be enough physical capacity to print it all in a timely matter. Hell, we’d probably run out of trees/cotton right now if we tried paying off our national debt in cash. Our creditors will just have to accept our binary ‘digi-dollars’, or wait awhile.
I can’t be overdrawn, I still have checks?
>> There just simply isn’t enough money out there... foreign governments will have to expend 4% of their GDP every year just for us to roll over our debt!
If they fail us, America’s Sugar Daddy Ben Bernanke has an ENDLESS appetite for treasuries.
Perhaps he’ll coin a new denomination and call it Obama Bucks. One Obama Buck will be equal to $100,000 US dollars.
However, this article like many, about sovereign debt, misses the main point. The main point is that USA and other nations no longer plan to borrow money from any known source. They plan to, if fact have started years ago, borrow money-out-of-thin-air (MOOTA). That's right, when they want more money they just call up their pseudo-national bank and request a loan. Their pseudo-national banker says fine&dandy and pulls up their exclusive money transferring screen wherein they transfer the requested _money_ TO the government (GOV), FROM nowhere! They most assuredly record this transaction as a debt owed by GOV, in their spreadsheet.
Since it is guaranteed that this kind of transaction will, and is, completely unraveling the worlds’ economies, businesses and soon the very lives of those who live upon the world, there are a whole lot of people who need to get a small clue...
“Round um up and put um to work!”
lol liberals working...such an oxymoron!
“Soon There Won’t Be Enough Money in the World to Fund US Debt”
Ha! The amount of money that the Bernank can create is limited only by the number supply.
QE-ternity can expand the money supply to infinity and beyond.
As others are saying, the Fed will just print more money and “buy” T-bills.
“which means Gov’t spending would be eventually be checked by the market”
It will be, anyway. The market, like murder, will out.
“You can ALWAYS print more”
Tell that to Weimar Germany.
If I borrow money that I can't re-pay and I borrow more (that I can't re-pay) to cover what I can't re-pay .. I eventually run out of money to borrow and get to the point of facing the leg-breakers.
(Sorry .. it's the best I can do)
And THEY say, "Give us our money or we break your legs"
Obviously I can't give any money so ... what? ... I get my legs broken?
And they leave me there to heal, but come back after re-hab and again say, "Give us our money or ... "
what? ... you'll kill me ?
OK .. they kill me ... my family has long ago fled THIS Joe MSZPKXFT (probably spelled wrongly), so there's no where to go.
OK .. I'm dead, the money's not paid and .. what now?
Worth aboth $300 on the open market ... piece of shit in the wrong part of town.
So, besides someone controlling my estate (America), what can happen?
See ... all this seems so futile.
Your summation was excellent. Right on spot!
Y'know... I really do hate to point this out, but it was 'W' who signed the first TARP bill.
I always side with the conservatives, but I'm not sure the GOP has any moral high ground on this particular issue.
So long as you have a central bank and legal tender you will fund your government through it. That’s a law of human nature. That was always the point of the Federal Reserve; well, that and bailing out Big Business when malinvestment leads to recession. It’s not that so far we’ve been borrowing and soon we’ll have to rely on inflation. Oh, no. Inflation’s done most of the work all along. Borrowing, and to a certain extent taxation itself, are PR to prevent the general public from freaking out and collapsing the monetary system.
Excellent post, and a lot of FReepers are out of date on this.
Bush was selling debt to China.
Baraq and Geithner just create it electronically.
“If I borrow money that I can’t re-pay and I borrow more (that I can’t re-pay) to cover what I can’t re-pay ...”
Not to worry. In the 21st Century you don’t need to do this in person. that’s what your CongressCritter is for...on your behalf..and that of your grandkids...
It’d help to imagine yourself as a counterfeiter. A really good one whose product is indistinguishable from the real thing. So good, in fact, that your debtors will continue to accept your funny money until the real thing becomes so obviously overabundant as to be worthless.
Whoops, you are the debtors. I meant your lenders.
Bush was creating it electronically, too. We’ve been creating it electronically or with paper since 1913.
Depends on what you mean by money.
From 1796 to 1912, the “money question” (what is it, who decides, and how are interest rates set) was one of the top three political issues in every election.
We have become so inured to the novel form of “money” that we use now that it seems normal, when it decidedly is not.
OK .. I lose the game ... what was the purpose?
They’ll just keep printing more. Heck they don’t even have to print it these days
“...what was the purpose?”
To “prove” to the world capitalism “doesn’t work” and that for the “sake of the women, children, blacks and the poor” it must be banned. And only Marxism/Communism, which is “fair” will be allowed.
Any other questions?
.000000001 % of the population?
I guess I'm leading up to ... without getting banned from FreeRepublic to stating ... I'm pretty sure I won't allow anyone to do that to me.
Read into that what you will.
No one wants to say words that we swore we'd say IF the election went the wrong way.
Isn’t it scary that people who think like little children can vote?
Kid: “Daddy, can I get a new bike?”
Daddy: “I don’t have the money right now.”
Kid: “Write a check.”
It is not his intention to "deal with that crisis", he is fully aware of what he is doing as he heads for the precipice with his foot flat out on the gas. It is his intention to destroy our economy. I base that assumption on his performance to date, there is no other explanation.
Digi-dollars, absolutely correct, The audit of the Federal Reserve books showed it leant out $16 trillion over a 3 year period to foreign and domestic banks. This amount, greater than the entire accumulated national debt at the time.
No money was printed, they wired electronic ones and zeros. The greatest financial fraud in history occurred and no one noticed.
“It is not his intention to “deal with that crisis”, he is fully aware of what he is doing as he heads for the precipice with his foot flat out on the gas.”
I agree. Unlike some, I will not ever consider him to be my President.
in case you were wondering exactly who they are...and what their plans for you and I really are...
I want you to imagine sitting in a room with 25 people, most of which have graduate degrees, from Columbia and other well-known educational centers, and hear them figuring out the logistics for the elimination of 25 million people.
And they were dead serious.
Here are the simple questions that all Republicans should be asking Obama:
Mr. President, are you consciously trying to wreck the American economy?
Mr. President, everyone agrees that the present course is unsustainable. Why do you continue to push us along this path?
[Want a solution? Here’s a start. Get rid of baseline budgeting, which guarantees annual increases. Freeze all budgets in place. Then start cutting waste and redundancy. I believe that Romney would have done something like this.]
At this point, the media, and those on the dole, know everything that they need to know. Obviously, they don't care.
And the Republicans won't fight.
So we're all sitting here waiting for the inevitable.
The only remaining question is how the inevitable plays out. My guess is that hyperinflation will cut American living standards by 50%. Done over the course of a couple of years, and with the complicity of the media, the layabouts, and most workers, won't be able to identify the cause of the problem.
The military will be cut by 70-90%.
Wealth and estate taxes on "the rich" will rise to 90%.
No government agencies will be eliminated. Entitlements will be cut substantially, as will the salaries of government employees.
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