Wave of Debt Payments Facing U.S. Government
By EDMUND L. ANDREWS
NYT
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.
(More here.)
NYT
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.
(More here.)
Powered by Blogger
1 Comments:
everyone knows this is George Bush's fault. In fact, I have coined a new political term - 'inheriter' (not to be confused with inheritor - someone due an inheritance).
Term: inheriter.
Pronunciation: in - hair - ə - ter.
Definition: someone who only blames the state of the economy on George W Bush while eschewing Barack Obama of any responsibility for policies passed while serving as president and as US Senator. Also ignoring the the fact that Democrats controlled Congress starting in 2006 - a full year before the recession began - and ignoring the role of Democrats such as Joe Biden, Barney Frank, Chris Dodd and Kent Conrad for their meddling with Freddie Mac, Fannie Mae, AIG and Countrywide for years prior to the collapse of the economy in 2008.
For example, the 'inheriter' would agree with Joe Biden when Joe Biden said in 2009 'we didn't know how bad the economy was' and the 'inheriter' would ignore the fact that Joe Biden served in the US Senate for 38 years before becoming Vice President making it virtually impossible for Biden to make a claim of not knowing how bad the economy was.
Another example is that even though the Democrats passed a stimulus plan in January 2009 claiming its passage would prevent unemplyment from going past 8% and when the unemployment went past 10% later in 2009, the 'inheriter' would blame that on George Bush.
Please use this new term!
Post a Comment
<< Home