Financing The Federal Budget Deficit

falcon · 02-06-2010, 11:22 AM

The US government will run a deficit of about 1.5 trillion dollars in FY 2010. Most folks would think that the US needs to find buyers for 1.5 trillion dollars worth of debt in 2010. Most folks would be wrong: The US has finance 3.5 trillion dollars worth of debt in FY 2010.

Why the 2 trillion dollar difference? That's easy, the nation is financed by short term loans. Two trillion dollars worth of those short term loans come due this year and they have to be re-financed; for another short term, of course.

Rolling over short term debt is really bad news. 40 percent of US debt is held by foreign countries. One of these days pretty soon those foreign holders of US debt are going to be demanding an increased interest rate. Since the US governmant does not have the assets to redeem even one trillion dollars of debt, the time honored alternative is to print more money. Printing more money lessens the value of your nest egg. There goes your well thought out plan for retirement.

Russia and India will not be buying any more US debt. India recently purchased 200 metric tons of gold.

emptyquiver2 · 02-06-2010, 11:38 AM

Have read a couple of articles on this Falcon, it paints a very bleak picture. We face an uncertain future for sure, an not knowing which direction to turn. We're going to need a huge rabbits foot to get out of this one.

Fieldmouse · 02-06-2010, 12:37 PM

Oh come on falcon, you know it's the rich just not paying their fair share. We can afford all our social programs.

falcon · 02-06-2010, 12:44 PM

Quote:

Oh come on falcon, you know it's the rich just not paying their fair share. We can afford all our social programs.

Yep, we could afford all that stuff if the fed just opened a few more printing plants.

Fieldmouse · 02-06-2010, 12:48 PM

Quote:

Originally Posted by falcon

Yep, we could afford all that stuff if the fed just opened a few more printing plants.

Hey, that helps with adding more jobs!

C. Davis · 02-06-2010, 01:23 PM

Quote:

Originally Posted by falcon

Yep, we could afford all that stuff if the fed just opened a few more printing plants.

Yea, who said the U.S. don't manufacture anything anymore? When the president was talking about green jobs I thought he meant something else.

C. Davis

Knightia · 02-06-2010, 03:47 PM

Quote:

Originally Posted by C. Davis

Yea, who said the U.S. don't manufacture anything anymore? When the president was talking about green jobs I thought he meant something else.

C. Davis

( i kinda hate to think of all the gov bills that are going to be due & the inflation etc involved with it all)