Since May, the official debt of the US government was frozen. It didn't change a penny despite billions in new bills, notes, and bonds issued. Then, from October 17 to October 18, it jumped $328 billion overnight. Instead of adding to the official debt, the Treasury used what it calls "extraordinary measures" to report money owed to other programs, like federal and military pensions, to fill in the hole not reported as debt. As shown during the shutdown and debt ceiling scare, the government cannot operate any longer without massive additional borrowing. It is accepted that large deficits (despite the shrinking YoY deficit) are essentially a permanent feature of the US government, that US debt can always be rolled over easily (unless Congress prevents it), and that all this debt issuance is good for the world.
If that was true, how did the world survive before 1975 when US deficits became permanent (except for one bubble stock capital gains year at the end of the 1990s)?
it jumped $328 billion overnight
ReplyDeleteWhat's a thousand dollars per capita among friends?
Stagflationary Mark,
ReplyDeleteIt's a lot to me, but I can't type numbers into my account on FedWire. That might change my perspective.
It's a lot to me...
ReplyDeleteI would not argue differently. One thousand dollars represents nearly 274 years of optimism!
(Find a penny, pick it up, and all the day you'll have good luck.)