[MonteQuest]

So, endless monetizing of the debt? That's what you mean?

Huh??? This reply made no sense.

The FED would purchase all govt debt in an endless liquidity swap when no one else will.

[MonteQuest]

If things got so bad that every single primary dealer suddenly went belly-up, I have a feeling the last thing we'd be worrying about would be about flights out of dollar-denominated assets. Needless to say, I'm not worried about such a scenario.

So, as the US govt debt rises to a really high debt to GDP ratio, and people question the risk and low ROI of dollar denominated assets, they won't seek safer havens, thus causing bond auctions to fail and capital flight?

I can surely see a financial collapse worse than the Great Depression in the offing.

High debt to GDP of 313% in China is sure causing capital flight.

With the dollar as the world's reserve currency, are we the last safe haven?

[C8]

Are you saying that their is no danger posed by deficits and debt since the US controls the world currency? Am I reading you correctly?

No. You're way off topic, actually.

WTF!? I CREATED the topic- it is you who are off topic and getting lost in details- read my OP which started this thread.

Now I ask you please be kind and answer the original question I posed (and the title of this thread)- how bad is the US debt situation?

[copious.abundance]

I was saying your specific response had nothing to do with the quote of mine that you quoted. That is, your reply was off-topic to what you were quoting.

We have spent the entire time here discussing how bad (or not) the debt situation is. If you don't understand the discussion, that's not my problem. Your original question, page 1 post 1, talked about the US defaulting. I responded to that question very directly right here.

[MonteQuest]

The only question that is relevant, is if there is a point, where the folks redeeming said treasury bills try to take the USD proceeds and turn them into real assets and consumables. That could create some inflation;

Some inflation? The FED is sitting on some $4 trillion dollars worth of dollar denominated assets. When the Fed does start to unwind these QE assets, I guess it will do so largely by allowing the securities to expire at maturity.There sure isn't a market for the bad debt siting on their balance sheet. But many of these securities are long-term. At 25% of GDP already, how much of the US debt can the FED buy before it affects the value of the currency? How solvent will the FED bank look under this scenario?

[misterno]

It is getting worse every year

Just look at the ratio below

[Plantagenet]

The debt situation was really bad under Bush, but its gotten twice as bad under Obama.

[Lore]

I didn't know it was 2020 already? We're just paying the price right now of the Bush spending spree on wars and economic giveaways. What a hangover! Looks though like it has leveled off since 2013.

[Plantagenet]

We're just paying the price right now of the Bush spending spree

Yes, of course you're right.

And we're paying a price twice as big for the Obama spending sprees on unnecessary wars etc., because Obama has doubled the national debt during his two terms in office.

Cheers!

[Lore]

No, Bush doubled the debt. Obama is just trying to pay for the credit card.

[Plantagenet]

No, Bush doubled the debt. Obama is just trying to pay for the credit card.

Obama doesn't have a credit card. Obama is using tax dollars and lots of borrowed money for his budgets.

Yes Bush doubled the debt---but then Obama doubled it again.

The annual deficits have been so large every year under Obama that the national debt will have doubled again by the time Obama leaves office..

Cheers!

[Lore]

No, Bush doubled the debt. Obama is just trying to pay for the credit card.

Obama doesn't have a credit card. Obama is using tax dollars and lots of borrowed money for his budgets.

Yes Bush doubled the debt---but then Obama doubled it again.

The annual deficits have been so large every year under Obama that the national debt will have doubled again by the time Obama leaves office..

Cheers!

Bush crashed the economy which setup trillions in debt for bailout, along with unpaid wars and tax cuts for the wealthy. The Bush debt started to creep up as soon as he took office, until he completely collapsed the economy. At which point we went parabolic in trying to recover. Also, don't forget that the cost of recovery was originally orchestrated by the Bush admin.

Double Cheers! and out!

[Plantagenet]

Bush ….Bush …. Bush …. Bush

I know, I know. Everything is Bush's fault. Poor Obama was forced into creating 8 trillion dollars in debt by Bush. Bush made him propose all that spending and all those new programs and Bush made him go to war in Libya and march the troops out and then march them back in to Afghanistan and Iraq---Obama was too weak to withstand Bush's evil influence on him….


I've got an idea!!! Lets get in our hot tub time machine and go back in time to the last decade and tell Bush not to create all the debt. Then when Obama doubles the debt in this decade it wouldn't have been so big to start with so even with quadrupling the debt just in 16 years we'd be OK now.

[Lore]

In your world everything is Obama's fault. How's that? Just because you repeatedly say so?

The Federal debt is an accumulation of our past indiscretions. No independent economist worth the beans they count would deny that.

[Plantagenet]

In your world everything is Obama's fault. How's that? Just because you repeatedly say so?

You're making things up. I've never said everything is Obama's fault.

ON the debt issue I've said repeatedly that Bush doubled the existing debt during his time in office a decade ago.

But we can't really talk intelligently about how bad the debt situation if we cut off discussion of the huge amount of debt that has been created in this decade.

It would be nice if the debt situation in the US was just limited to debt created before 2008. But the real world doesn't work like that--time marches on and change happens.

CHEERS!


LOOK! The debt situation got worse after Bush left office!!! How could that possibly be?

[Lore]

And what actually was the cause of that debt? You fail to point that out. Give me some numbers as to how Obama has added to it other then the bailouts agreed upon by Congress prior and during his administration? Then compare that with the past screwups.

[Plantagenet]

And what actually was the cause of that debt? You fail to point that out.

Isn't all that obvious? Why should I point out the obvious?

OK...just for you, Lore.

The cause of the debt is that the government spends more then it takes in.

The government spends so much more than it receives in taxes that the government has to sell bonds or otherwise borrow money to cover the shortfall, and that borrowing has gone on for many years, creating more and more debt.

Get it now?

CHEERS!