Posted on 02/03/2024 8:06:32 AM PST by Angelino97
Yesterday the Treasury Department announced that they expected to increase the national debt by a whopping $760 billion this quarter alone… and another $202 billion next quarter.
In short that means almost $1 trillion added to the national debt just in the first half of this year. And, again, these are the Treasury Department’s own estimates.
Obviously, that’s a pretty horrible result; even a senior Treasury official acknowledged that they have “significantly increased” their bond sales and the national debt. Not that they’re doing anything to stop the trend.
But there’s an even greater risk that the Treasury Department faces this year that is hardly being discussed anywhere.
Over the next twelve months, more than $6 trillion in existing US government debt is set to mature… and will need to be paid back somehow.
So, to give you an example, back in 2014, the federal government issued $264 billion in 10-year Treasury notes.
Well, it’s now 2024, i.e. ten years later. Meaning that $264 billion worth of 10-year notes issued in 2014 will become due and payable this year.
In 2017, they issued $368.8 billion worth of 7-year notes. And those 7-year notes issued in 2017 are due and payable this year.
You get the idea. The point is that the total sum of Treasury Bonds, Notes, and Bills outstanding that will become due and payable this year exceeds $6 trillion.
So, in ADDITION to the $1 trillion in NEW debt that they’re forecasting just in the first six months of 2024, the Treasury Department is also going to have to pay back $6 trillion of existing debt.
Naturally the Treasury Department doesn’t have $6 trillion lying around to pay back its bondholders. So instead of paying anyone back, they just borrow new money to repay the old money.
(Excerpt) Read more at schiffsovereign.com ...
Because, hey, we can afford it.
If my grocer would just stop profiteering on food, we could kill inflation.
National Debt has never been a problem fixable - nobody’s willing to do so.
It’s like asking for Term Limits - Congress will never do.
A trillion here, a trillion there and pretty soon you’re talking real money.
"Reality" would make the Great Depression look like...good times.
Like Elaine said...fake fake fake fake.
Welcome to fundamental transformation.
Don’t many investors roll over maturing notes and bills, rather than cashing out?
New York city is now giving illegals a monthly income if you can believe it, I think they said $1000 a month. Well the morons there voted for this, they voted 89% democrat last November.
I think China is about ready to foreclose on us to settle their own problems.
The article addresses this, further down:
Now, this doesn’t actually increase the national debt. If they borrow $6 trillion in new bonds, but then pay back $6 trillion in old bonds, the net change to the debt is ZERO.
So, what’s the problem?
The problem is that interest rates are MUCH higher than they were 2, 3, 5, 7, and 10 years ago when those old bonds were first issued.
In 2021, for example, the Treasury Department issued almost $1 trillion in 3-year bonds back when interest rates were nearly 0%.
But since those 3-year bonds from 2021 are due and payable this year, the Treasury Department will have to borrow new money at today’s interest rates... which are hovering around FOUR percent.
And higher interest rates mean that the government’s annual interest bill will soar.
The way you do this is to roll the 10 year debt into 30 year debt. It increases your cash flow, but your future is screwed.
This is what Clinton did to generate his “surplus.” It was smoke and mirrors then. It’s is smoke and mirrors now.
It is akin to using a home equity loan to go to the movies.
“ Don’t many investors roll over maturing notes and bills, rather than cashing out?”
My understanding is that nearly all of them do just that.
L
One morning the music will stop and the punch bowl removed, and the most horrible fiscal hangover will begin, possibly lasting for years. It won’t be Morning in America, but rather misery all across the land.
Biden will be gone and Republicans will probably take the blame.
This is selfish, but I’m glad to be an older man with not much time left. Our children and grandkids however will be in for a horror story.
How ‘bout that “Xidenskyyyyynomics”?
> Because, hey, we can afford it.
Just cut “unnecessary” defense spending...
All federal spending must originate in the House of Representatives. If the GOP controlled the House at least some of the time, this wild spending wouldn’t occur.
I kid, of course. R or D. Deep State or Trump. Nobody cares.
But as you noted, as long as pet projects are funded (overseas spending, EV subsidies, etc.) I guess it’s all good. Sort of like being on an out-of-control party bus. Lots of fun until you run out of road.
What effect will this have on short term (4 week, 8 week) T-bills?
Up? Down?
Quote: And higher interest rates mean that the government’s annual interest bill will soar.
That was always the problem. (I know I am over simplifying here, but indulge me) Under Obama, a crap economy has hidden away by historically low interest rates. Money was free, servicing the National Debt easy. Let the Government cheese roll!!
That is why it was more important than ever to keep inflation in check. The adults knew this. But implementing the COVID scam color revolution was deemed more important. Having a summer of love and lockdown was more important. Trump had to go. Mail in voting yes. Shutting down the economy, yes.
Send out the free money, keep sending it out under Biden and damn the torpedos as inflation skyrockets and so do those rates.
Seems like the bill is about to come due for that color revolution.
The maddening thing is that when this all crashes, the commies will sit around declaring how they are the only ones that can save us from the shipwreck they caused. The media will kick into full gear changing history to declare that the democrats were always fiscally responsible.
Down the memory hole will go the decades lap and decades of GOP budget hawks screaming about the debt and government spending, only to be treated with adverts featuring them pushing granny over a cliff.
Kevin McCarthy signed onto a deal with Chuck Schumer and Joe Biden that the national debt would not exceed 36 Trillion before 1/1/2025. Since the debt is already over 34 Trillion, it looks like the McCarthy Deal is going to fail. Expect debt ceiling debates during the election cycle, just about the time all of the imaginary absentee ballots start getting filled out.
The term “GOP budget hawk” became a comical joke during the GWB administration. Remember that it was the GOP that implemented a massive new Medicare prescription drug entitlement while pissing away trillions of dollars and thousands of American lives in Iraq and Afghanistan.
What cannot be sustained will stop.
$34.199 TRILLION in official debt....Federal Budget Deficit Grew to $2 Trillion in FY 2023 Tax Foundation, 12 October 2023
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