Senate Proposes Increasing U.S. Debt Limit to $14.3 Trillion http://www.bloomberg.com/apps/news?pid=20601103&sid=a8STKZn2nYiU The U.S. debt limit would be raised by $1.9 trillion to $14.29 trillion under an amendment proposed in the Senate. The chamber began debate yesterday on raising the debt ceiling for the fifth time in two years after lower tax revenue from the recession and higher stimulus spending boosted the calendar-year budget deficit to an all-time high last year. âIf Congress does not enact this legislation, and soon, then the Treasury would default on its debt for the first time in history,â said Senate Finance Committee Chairman Max Baucus, a Montana Democrat. We put the PIIGS to shame.... but hey, we can get away with it. They can't. Problem is, all this debt will need to be serviced.... extend and pretend until the collapse. Faber was right, money printing will be going on until the entire system collapses.
100% of GDP, now that is something to look forward too. Only way to keep the economy floating is to print as much as they can, of course this can only last so long before the system collapses.
As long as rates are low, the gov is going to keep issuing bonds. Why wouldn't they when investors are lending money for almost nothing?
I completely ignore it when they talk about "raising" the debt ceiling. Why do i ignore it? Because I know there is no debt ceiling. How can there be a debt ceiling when every time we reach it, they just raise it? And why does it need to be so high anyway? Didnt all those banks say they paid back the TARP? Theres half a trillion that should've gone back to paying the debt, but it didnt did it? Where did that money go?
Good point. But you have to admit, approaching or breaching the GDP threshold is a milestone in itself. I think it illustrates the inherent flaw of a fractional reserve/fiat model economy. (and no, I'm not suggesting a solution or supporting the abandonment of our current system here - that's another debate) What I am saying is that every subsequent dollar of debt creates a dimishing amount of gdp growth. Debt outpaces gdp growth, that's apparent if you look at debt to gdp for the past 30-40 years. This is obviously and clearly unsustainable. So what's the end-game? Is there a plan? Do we wait it out for every other nation to default/hyperinflate first? Will the last man standing be the victor and dictate the next global monetary regime? Or is there no plan, that the current crisis is merely an uncontrollable runaway train... and we are merely both spectators and passengers watching a real-time slow-motion (for now) impending train wreck? Friedmanites, Keynesians, Neo-classical economists, please explain to me how this is normal!