{"id":34163,"date":"2018-05-11T07:15:10","date_gmt":"2018-05-11T12:15:10","guid":{"rendered":"http:\/\/olduvai.ca\/?p=34163"},"modified":"2018-05-11T07:15:37","modified_gmt":"2018-05-11T12:15:37","slug":"beware-of-the-coming-economic-debt-bomb","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=34163","title":{"rendered":"Beware of the Coming Economic Debt Bomb"},"content":{"rendered":"<div class=\"row article-header-row article-standard-header-row\">\n<div class=\"col-md-12 share-header-col\">\n<header id=\"article-header\" class=\"article__header\">\n<h3 class=\"article__headline \"><a href=\"https:\/\/www.thestreet.com\/investing\/stocks\/beware-of-the-coming-economic-debt-bomb-14584620\">Beware of the Coming Economic Debt Bomb<\/a><\/h3>\n<div class=\"article__callout article-standard__callout\"><strong>Investors should start paying attention to the nation&#8217;s growing debt. Here&#8217;s why.\u00a0<\/strong><\/div>\n<\/header>\n<\/div>\n<\/div>\n<div class=\"row\">\n<div class=\"col-md-8 article__main-container article-standard__main-container\">\n<article id=\"article-14584620\" class=\"article\" role=\"article\">\n<div class=\"article__top article-standard__top\">\n<div class=\"article__video\">\n<div id=\"video-container\" class=\"video-container video-by-category__embed-container video-container--moved\">\n<div id=\"video-inner-wrap\" class=\"video-inner\">\n<div class=\"embed-responsive embed-responsive-16by9\">\n<div id=\"global-video\" class=\"globalVideo\">\n<div id=\"vidPlacedholder\" class=\"video-js-responsive-container vjs-hd\">\n<div id=\"content_video_vidPlacedholder\" class=\"video-js vjs-big-play-centered vjs-default-skin content_video_vidPlacedholder-dimensions vjs-fluid vjs-controls-enabled vjs-workinghover vjs-has-started vjs-paused vjs-user-inactive\" tabindex=\"-1\" role=\"region\" aria-label=\"video player\">\n<p><video id=\"content_video_vidPlacedholder_html5_api\" class=\"vjs-tech\" tabindex=\"-1\" src=\"https:\/\/vid.thestreet.com\/p\/105\/sp\/0\/playManifest\/protocol\/https\/entryId\/0_wdtfotf7\/format\/url\/flavorParamId\/35\/video.mp4\" preload=\"metadata\" width=\"300\" height=\"150\" data-mce-fragment=\"1\"><\/video><\/p>\n<div>&#8220;There is a sword of Damocles hanging over the head of every American. Sadly, it is about to drop.&#8221;<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"article__page article-standard__page\">\n<div id=\"page-content\" class=\"article__body \">\n<p>Sorry for the drama, but I need to get your attention.<\/p>\n<p>We know that the <a href=\"https:\/\/www.thestreet.com\/investing\/powell-says-fed-not-to-blame-for-emerging-market-capital-flows-14582935\" target=\"_blank\" rel=\"noopener\">Fed has kept interest rates low<\/a> for many years until recently. Why did it do so? Here are some of the reasons we have been told:<\/p>\n<ul>\n<li>The Fed wanted to stimulate the economy.<\/li>\n<li>The Fed wanted to make it easier for Americans to borrow.<\/li>\n<li>The Fed wanted to create a &#8220;wealth effect&#8221; to encourage spending.<\/li>\n<\/ul>\n<p>Which of these statements do you think explains the primary reason for the Fed&#8217;s decision to keep interest rates low? Don&#8217;t bother. It is none of the above.<\/p>\n<p>The primary reason the Fed kept interest rates low was to avert an economic catastrophe. Today, that catastrophe can no longer be avoided. The trigger for the economic explosion is the rising interest payments on the federal debt.<\/p>\n<p>Let&#8217;s go through the numbers.<\/p>\n<p>During the eight years of the Obama administration, our total national debt rose from $12.3 trillion to $20 trillion while interest rates sank to a new all-time low. (The national debt figure includes money owed by the government to itself. The debt held by the public is what interests us since the government must pay out the interest to those bond holders.)<\/p>\n<div id=\"experience-5978ec1628448\"><iframe loading=\"lazy\" src=\"https:\/\/view.ceros.com\/thestreet\/tech-analysis-trends-2-1-1-2-1-1-1-1-5-1-2-1-1-1-1-1-1-1-1-1-1-1-1-2-1-1-1-1-1-1\" width=\"800\" height=\"175\" frameborder=\"0\" scrolling=\"no\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\"><\/iframe><\/div>\n<p>In 2009, the year President Obama took office, the national debt held by the public was $7.27 trillion. At the end of fiscal 2016, that had soared to approximately $14 trillion. Given that our marketable debt doubled from 2009 to 2016, it&#8217;s remarkable that the annual cost of the interest on the debt rose far less, from $185 billion to $223 billion.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Beware of the Coming Economic Debt Bomb Investors should start paying attention to the nation&#8217;s growing debt. Here&#8217;s why.\u00a0 &#8220;There is a sword of Damocles hanging over the head of every American. Sadly, it is about to drop.&#8221; Sorry for the drama, but I need to get your attention. We know that the Fed has [&hellip;]<\/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":[175,195,7346,303,305,431,534,20091],"class_list":["post-34163","post","type-post","status-publish","format-standard","hentry","category-economics","tag-credit","tag-debt","tag-debt-bomb","tag-fed","tag-federal-reserve","tag-interest-rates","tag-monetary-policy","tag-the-street"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34163","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=34163"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34163\/revisions"}],"predecessor-version":[{"id":34165,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34163\/revisions\/34165"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}