The Empire Needs to Sell $12 Trillion of New Treasuries to Stay Afloat Through the 2020s

That is in addition to recycling all the bonds outstanding

Washington has been drowning in red ink for years and it’s only going to get a lot worse over the next decade, a fresh government estimate shows.

The U.S. is likely to add $12 trillion in public debt from 2020 to 2029 through a combination of higher government spending and slower economic growth, according to the Congressional Budget Office. [Ie according to US government.] That’s on top of the $16.6 trillion the government is expected to owe to the public at the end of 2019.

Unless the red fiscal tide is reversed, the percentage of the U.S. public debt relative to the size of the economy would climb to 93% by 2029 from 78% right now.

That’s a bit lower than the CBO’s prior forecast, but it would still be historic in a time of peace. The last time the U.S. debt was that big was shortly after the end of World War Two, a period when the government spent enormous sums to defeat the Nazi menace and Japanese militarism.

Expressed another way, the public debt would average 4.4% of gross domestic product from 2020 to 2029.

“Such deficits would be significantly larger than the 2.9% of GDP that deficits averaged over the past 50 years,” the CBO said.

What’s the problem? The CBO predicts a steady increase in federal spending based on current law, particularly to pay for health care and other expenses for the elderly.

Although tax receipts are likely to increase despite large tax cuts by the Trump White House, they won’t rise as fast as spending, the agency said.

At the same time, the U.S. economy is likely to decelerate from a projected 3.1% growth rate in 2018 to an annual average of 1.7% over the next decade [How much of that 1.7% will be statistical hocus pocus?], the CBO projects. Previously the agency had predicted the economy would grow slightly faster in the next 10 years.

The agency believes slow population growth is one of the chief reasons — along with higher interest rates by the Federal Reserve.

The CBO, of course, could be wrong. The economy could grow much faster than it expects, taxes could rise or spending could fall. [Or taxes could fall when the bubblegedon hits.] Yet if the agency is right, the fiscal health of the U.S. will continue to deteriorate.

In 2019, the annual U.S. deficit is forecast to rise to $900 billion from $779 billion in 2018. The deficit is projected to top $1 trillion annually beginning in 2022 — two years later than the CBO originally forecast. [Actually the FY2019 deficit just came in at $984 billion in September.]

Source: Market Watch

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[…] Empire Needs to Sell $12 Trillion of New Treasuries to Stay Afloat Through the 2020s by Jeffry Bartash for Check Point […]

thomas malthaus
thomas malthaus
9 months ago

http://www.cluborlov.com/
The Art of Betrayal.

I would venture Ukraine is under the Sword of Damocles.

Mary E
9 months ago

Good Luck on selling even a small portion of that $12 million! What sort of fools are running Washington anyway? They certainly don’t consult with economics experts!
The poor educational system of the US (whatever is left of it that is) is showing with those delusional dumbbells and their policies – or lack thereof.

Mary E
9 months ago

The way I’m reading this, the author is blaming senior’s welfare (social security, medicare) for alot of the US’s money problems….NOT SO! Social Security really does pay for itself – and Medicare – but the SS trust fund has been raided by other government agencies so many times, for $ Billions that is looks like it isn’t run in a good fiscal way.
The REAL problem is the US military spending! The Pentagon’s budget is close to $800 million/annum …so much more than is even sane…and imagine how much that kind of money, even 50% of it, could do for the American infrastructure and health programs!
Instead, it goes to fund over 90 military bases/installations throughout the world and invading countries that have vast amounts of oil- has anyone in Congress ever thought of not voting for the exhorbitant amounts of funding to the Pentagon???
The US government squanders American taxpayer dollars faster than a drunken sailor.

silver7
silver7
9 months ago

Read things like this before. But their printing press is still 100% operational. The 1st article about the US printing press being broken will spread mass hysteria and another type of talk.

Mary E
9 months ago
Reply to  silver7

OK, the printing presses are still operational, but what about the debt to China
and to the future generations of Americans who will be saddled with this debt?
If China called due the monies that it has due right now, the US would not be able to pay any part of it… no matter how fast those presses run. My guess is that the US will never pay China….or any other country it has borrowed from…ever. It can’t!! The way it will work is that the Chinese government will take over assets of the US …in the US!! It will be a very unpleasant situation!!
This is what pipe dreams, taken seriously, can do to an Empire…

All_has_An _END_.
All_has_An _END_.
9 months ago

Endgame: Starting In 2024, All US Debt Issuance Will Be Used To Pay For Interest On Debt
https://www.zerohedge.com/news/2019-05-01/minsky-moment-starting-2024-all-us-debt-issuance-will-be-used-pay-interest-debt

Richard Hollembeak
Richard Hollembeak
9 months ago

As Puerto Rico has gone , is the USSA quickly following ?

plamenpetkov
plamenpetkov
9 months ago

federal spending is out out control NOt because of health care but because of the fake “war on terror” USA has been waging for the last 20 yars. by some estimates, USA has spent over 8 trillion on the fake war. Funyn how those so called articles ALWAYS lament the federal spending on people but NEVER mention the spending on fake wars.

Anti-Empire