{"id":31407,"date":"2018-02-21T18:41:17","date_gmt":"2018-02-21T23:41:17","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31407"},"modified":"2018-02-21T18:41:17","modified_gmt":"2018-02-21T23:41:17","slug":"who-is-it-that-wants-to-buy-trillions-of-us-treasurys","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31407","title":{"rendered":"Who Is It That Wants to Buy Trillions of US Treasury’s???"},"content":{"rendered":"

Who Is It That Wants to Buy Trillions of US Treasury’s???<\/a><\/h3>\n
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As of the latest Treasury update\u00a0showing\u00a0federal debt as of\u00a0Wednesday, February 15…federal debt (red line below)\u00a0jumped by an additional $50 billion from the previous day to $20.76 trillion.\u00a0 This is an increase of $266 billion essentially since the most recent debt ceiling passage.\u00a0 Of course, this isn’t helping the debt to GDP ratio (blue line below)\u00a0at 105%.
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\nBut here’s the problem.\u00a0 In order for the\u00a0American economy to register growth, as\u00a0measured by\u00a0GDP (the\u00a0annual change in total value of all goods produced\u00a0and services provided in the US), that growth\u00a0is now based solely upon the growth in federal debt.\u00a0 Without the federal deficit spending, the economy would be shrinking.<\/p>\n

The chart below shows the annual change in GDP minus the annual federal deficit incurred.\u00a0 Since 2008, the annual deficit spending has been far greater than the economic activity that deficit spending has produced.\u00a0 The net difference is shown below from 1950 through 2017…plus estimated through 2025 based on 2.5% average annual GDP growth and $1.2 trillion annual deficits.\u00a0 It is not a pretty picture and it isn’t getting better.
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\nEven if we assume an average of 3.5% GDP growth (that the US will\u00a0not have a\u00a0recession(s) over a 15 year period)\u00a0and “only” $1 trillion annual deficits from 2018 through 2025, the US still continues to move backward indefinitely.
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\nThe cumulative impact of all those deficits is shown in the chart below.\u00a0 Federal debt (red line)\u00a0is\u00a0at $20.8 trillion and\u00a0the annual interest expense\u00a0on that debt (blue line)\u00a0is jumping, now over a half trillion.\u00a0 Also shown in the chart is the likely debt creation through 2025 and interest expense assuming a very modest 4% blended rate on all that debt.<\/div>\n

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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Who Is It That Wants to Buy Trillions of US Treasury’s??? As of the latest Treasury update\u00a0showing\u00a0federal debt as of\u00a0Wednesday, February 15…federal debt (red line below)\u00a0jumped by an additional $50 billion from the previous day to $20.76 trillion.\u00a0 This is an increase of $266 billion essentially since the most recent debt ceiling passage.\u00a0 Of course, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,14704,2700,391,18829,15497,2721],"class_list":["post-31407","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-economica","tag-gdp-growth","tag-growth","tag-us-economic-growth","tag-us-federal-debt","tag-us-treasuries"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31407","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31407"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31407\/revisions"}],"predecessor-version":[{"id":31408,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31407\/revisions\/31408"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31407"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31407"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31407"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}