US Budget deficit projected to be $492 billion...

[WackyDan]

What are you basing this on?

http://online.wsj.com/news/articles...0001424052748704621304576267113524583554.html

I've seen several other articles on this as well. There just isn't a large enough tax base to support the escalating costs of entitlements, not to mention the growing debt and spending...Period.

 

[fskimospy]

http://online.wsj.com/news/articles...0001424052748704621304576267113524583554.html

I've seen several other articles on this as well. There just isn't a large enough tax base to support the escalating costs of entitlements, not to mention the growing debt and spending...Period.

That's definitely not accurate. Whatever you're talking about is relying on dubious assumptions.

 

[fskimospy]

I get that, though it's gimmicks. I'm counting the widely used and understood public national debt, the one that got used for the 680billion quote from the article.

You aren't though. All these figures are talkin about the debt held by the public. You're talking about the debt held by the public and intragovernmental debt combined. That is a much less widely used number and it is not where the $680b figure came from.

 

[fskimospy]

If you left pocket borrowed 300 Billion $ to loan to your right pocket, yes you're poorer.

But whatever. You clowns want more Gov't debt, we're going to get it. Frankly I'm ok with that.

It has two effects :
The rich get even richer, even faster, because your Uncle Sam owes them big.

The end result of excess spending comes even faster.

My guess is that the end result happens shortly after SS stops having excess funds to buy treasuries with. That's all they have in their trust fund - US Gov't debt.

That's the double whammy. Not only does a major "buyer" of US debt (social security) stop buying, but that buyer also starts redeeming tens, then hundreds of billions in treasuries each year. The US Treasury must then either take the funds from general revenue, or borrow even more ( from a reduced pool of lenders, since SS won't be there lending to them ).

The little bump we got in taxes last year for SS just pushed this scenario off for a few years, since SS was already starting to take interest on its outstanding bonds as cash rather than buy new bonds (in 2012). Now they're back to buying treasuries - for a little while.

You know you can only kick that can down the road for so long.

Keep on thinking this chart and the sluggishness of economic "recovery" are unrelated.

Riiiiiiiight. So can you show me the effect of this on bond yields? Since they stopped 'buying' bonds for a bit and then started again, we should have a wonderful natural experiment. So show the results!

By the way my question from before still stands. Just give me a basic framework for what you think will happen and why.