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I present to charts; one is the budget deficit since Obama's time in office, and the other is the official budget deficit established by congress. Since the 2013 data is incomplete, i used a simple geometric mean of previous data to fill in the rest of the year. All data used can be found here.
View attachment 67152022
View attachment 67152023
So what does it tell us? The budget deficit that can be attributable to the Obama administration (yearly) is likely to decrease by 51% in 2013. During his presidency, the budget deficit will have declined by 65%. The official U.S. budget deficit is likely to come in at $686 billion, a 35% decrease from the year prior.
A bell should be ringing for the more astute members here. Since January 2013, the Federal Reserve has purchased about $359 billion in Treasury securities, while the debt specific supply of Treasury securities since January 2013 is $315.3 billion, meaning the Federal reserve is facing a whole new dilemma. They are losing their ability to control long term interest rates, given their current policy tools. As the Fed's demand for USTS's continues to exceed debt specific supply on a consistent basis, two things can occur. First, a dual pricing mechanism can emerge with respect to the Maiden Lane transactions and the rest of the secondary Treasury market. Primary dealers are fully aware that the Fed's purchasing program is likely to exceed the net debt issuance of the U.S. Treasury. Durations that receive the least targeting of Fed purchases (longer dated securities) will have a downward pressure in prices as secondary dealers crowd into where the Fed action is most aggressive. Which creates the need of a future twist program to smooth out the yield curve (point 2).
One thing is certain. The notion of a U.S. debt crisis has been completely overblown.
The data on asset purchases can be found here.
That's not our debt just spending over what we actually took in.
Debt vs Deficit - What Does It Mean?
Not sure why you decided to respond as though i mixed up the terminology.
I'm not sure why you would say the US Debt crisis has been completely overblown? The debt is declining thanks to a Republican Congress that continues to say no as often as it can and an increase in revenues when the social security 2% gift was ended.
The creation of money by the FED has in the past lead to inflation.
I don't think you can find anywhere in your charts where the funds created by the FED and used to buy debts that no one else would buy is eventually going to bite us in the back side.
How can you honestly think the nation can increase its money supply so dramatically and not have a long term ramification?
What happens when the worlds producers of oil, goods and supplies don't want the paper we call the dollar any more?
I think the only thing keeping the wolves at bay today is that the only other two currencies in the world capable of world trade are worse off than our own ( Euro / Yuan). Our currency is the world reserve currency. Talk to me about "debt crisis" when that causes the world to seek another reserve.
Not sure why you decided to respond as though i mixed up the terminology.
You said the debt crisis was overblown.{it's not} Makes me think you don't realize the difference.
As long as we can keep inflation down then the debt isn't the main issue.
If we were spending money in more productive ways (Infrastructure, insert idea here) then we should be seeing some faster growth and even faster debt reduction.
The increase in employment should come before inflation begins and debt is a huge issue. I really think too many are hesitant to invest because no one knows how we are going to approach this. Congress is so unpredictable and dysfunctional that not many are confidant enough to start rebuilding our economy.
The budget deficit that can be attributable to the Obama administration (yearly) is likely to decrease by 51% in 2013. During his presidency, the budget deficit will have declined by 65%.
You pick an interesting benchmark for the word decrease.
The more astute members hear a different bell. There is no one buying Treasuries other than the Federal Reserve.
You pick an interesting benchmark for the word decrease.
The more astute members hear a different bell. There is no one buying Treasuries other than the Federal Reserve.
That's not our debt just spending over what we actually took in.
Debt vs Deficit - What Does It Mean?
His point was that with federal deficits declining, the risk of a debt crisis is also receding. I'm sure he'd agree, the reality is that the U.S. never faced a near-term debt crisis. Any debt crisis lies in the long-term if the nation's long-term imbalances are not addressed. No debt crisis was or is imminent.
The interest alone will eventually kill us. Just like any other long term debt that can't be paid back.
And truthfully, I don't trust those numbers. The FED makes crap up.
Treasury Ran $98 Billion Deficit in July--But Debt Stayed Exactly $16,699,396,000,000 | CNS News
We won't face a real debt crisis until the creditor call in the loans. Waiting.....
There is no one buying Treasuries other than the Federal Reserve.
His point was that with federal deficits declining, the risk of a debt crisis is also receding. I'm sure he'd agree, the reality is that the U.S. never faced a near-term debt crisis. Any debt crisis lies in the long-term if the nation's long-term imbalances are not addressed. No debt crisis was or is imminent.
There is no one buying Treasuries other than the Federal Reserve.
As long as we can keep inflation down then the debt isn't the main issue.
If we were spending money in more productive ways (Infrastructure, insert idea here) then we should be seeing some faster growth and even faster debt reduction.
You are not considering how inflation or economic growth will eat away at interest expenses.
Your source is highly misinformed.
Sort of. So long as we can keep growth in GDP ahead of growth in Debt, we are good.
Wholeheartedly agreed. I'm so happy to see you join the coalition to remove money from the directing hands of politicians, who allocate it according to political incentives rather than incentives related to productivity, and back into the hands of the market, which allocates it according to precisely the formula you propose.
Nominal... or real?
Not all private sector price discovery methods are ideal. For example, in competitive markets, cost-plus pricing ensures inefficiency.
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