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RE: Wave of Debt Payments Facing US Government

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RE: Wave of Debt Payments Facing US Government
by flynn23 at 11:23 am EST, Nov 23, 2009

Hijexx wrote:

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...

The United States will not be the only government competing to refinance huge debt. Japan, Germany, Britain and other industrialized countries have even higher government debt loads, measured as a share of their gross domestic product, and they too borrowed heavily to combat the financial crisis and economic downturn...

The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years. On top of that, the Treasury has to refinance, or roll over, a huge amount of short-term debt that was issued during the financial crisis. Treasury officials estimate that about 36 percent of the government’s marketable debt — about $1.6 trillion — is coming due in the months ahead...

HAHAHA! House of cards. One of the things hidden in many other country's finances is how quickly their health care costs are growing. Unifying costs under a single payer system, like many other industrialized nations have, only makes the problem of paying for it worse. The disease prevalence rates and cost increases are the same across the globe. With the baby boom generation being a global phenomenon, it's going to get really ugly in the next 10-20 years.

RE: Wave of Debt Payments Facing US Government


 
 
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