Posted on 11/01/2019 3:12:07 PM PDT by Berlin_Freeper
Pish posh. Fauxahontas needs $32T. What’s a measly $23T?
What did Bush add? And the difference is we got dead and MANY brain injured vets.
clinton, bush, obama..24 years of BAD presidents.
https://www.treasurydirect.gov/govt/reports/pd/debttothepenny.htm
6. But the grand nostrum will be a public debt,...
11. As soon as sufficient progress in the intended change shall have been made, and the public mind duly prepared according to the rules already laid down, it will be proper to venture on another and a bolder step toward a removal of the constitutional landmarks.
We have arrived.
https://famguardian.org/PublishedAuthors/Indiv/FreneauPhilip/freneau.htm
The size of the debt has to be compared to the size of the GDP. Otherwise talking about the number of dollars is meaningless.
As of 1/1/2018 interest payments were 1.6% of GDP.
Back in 1991 interest payments were virtually double that, 3.1%
Deficits get added to the total national debt. I suspect that the ever increasing national debt is the primary driver of the dollar’s loss of purchasing power over the years.
The national debt used to be included in the largest measure of the money supply, back when someone was still measuring M1, M2, M3, M4.
Agreed.
Back in 1991 interest payments were virtually double that, 3.1%
True, but interest rates were more that double what they are today.
President Trump, after he wins 2020, might just be the right guy at the right time to announce a default on the debt and wipe the sorry slate clean; a purposeful and (hopefully) manageable world reboot.
And Congress just keeps on spending money that must come from people who will not be born for forty years.
I don’t know of a correlation between interest rates and the % of GDP that total interest payments comprise. There might be one, I just don’t know that there is.
In 1991 we were still paying an inflation premium. Inflation was running at 4%.
It wasn’t until 2001 that interest rates entered their current low range. And of course in 2008 they collapsed to historic lows. They are still so low you earn very little on your savings.
It seems that if interest rates are double the interest dollars spent on on a given amount of debt should be double.
If interest on a given debt is 2% of GDP at 5% interest it will be 4% of GDP at 10% interest.
As you said, debt needs to be evaluated as a % of GDP, but unlike debt interest payments are a function of interest rates and need to be adjusted from year to year.
“It seems that if interest rates are double the interest dollars spent on on a given amount of debt should be double.”
It would be difficult to know what effective interest rate was actually being paid on the national debt in 1991. Or in any other year for that matter.
We would know what was being asked for newly issued debt but the debt as a whole is a collection of bill and bond issues that are sold over a time period going back as far back as 30 yrs and maturing at various time intervals.
If the debt as a whole rolled over every year we could figure out the effective rate easily but it doesn’t do that.
1991 would have contained a lot of very high coupon issues that were sold during the inflation that began in the 1970s and continued into the first years of the Reagan Administration.
Today’s debt would contain a lot of very low coupon bonds issued after 2001. And if the Treasury locked in those rates with 30 yr bonds they will continue to pay low interest for another decade at least
However Congress and the Treasury should definitely plan for an era of high rates when your scenario will take effect, and increased rates will show up as a larger % of the GDP required to cover the debt payment. Easier to get the Treasury and the Fed to do the right thing than Congress, and unfortunately Congress is the only one who gets to vote on it.
Warren’s planning on spending $30 Trillion on ‘Medicare for All’... our total debt over many years is NOTHING compared to that...
Ding, ding, ding - we have a thread winnah!
We’re a reserve currency - if bad goes to worse we can inflate our currency.
Not to underestimate the enemy, but the savages that ransacked that walwart are low hanging fruit if our nation slides into such turmoil.
BAHAHAHAHA! Thank you, Theoria! Loved that!
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