patrick.net

Bellingham Bill says

Fed printed $1.8T to buy stupid mortgages 2010-2014.

They can print $1.8T to pay off the UST in the SSTF as they are needed to be cashed out.

Are you serious here or are you joking?

We haven't even started the debt dance yet....

There is no mathematical way to pay the debt off any time this century ....

We will be luck to have any yearly surplus in the next 50 years let a lone have an extra 30 trillion dollars plus in revenue after expense

This isn't a tricky Algo model, here..... this is as simple as it gets

3 - 5 = -2

Nothing is going to change that, we will never reform entitlements nor will we raise taxes in any meaningful way... It is what it is ...

Logan Mohtashami says

Bellingham Bill says

Fed printed $1.8T to buy stupid mortgages 2010-2014.

They can print $1.8T to pay off the UST in the SSTF as they are needed to be cashed out.

Are you serious here or are you joking?

You're both right. The Fed did waste money on MBS and in general putting all kinds of bad debt on its balance sheet, but that will never change as there is no will to overcome this cronyism. In the light of this blunt corruption on the open it is clear that they don't care and will keep printing and accumulating federal debt, pretending that it "won't matter" and everyone just passes on the hot potato hoping it won't happen under their watch. But it will matter. Taking responsibility and not fucking over future generations is so out of the question because politicians only care about being re-elected and lining their own pockets and nobody wants to be the on explaining to their constituents on their watch that the piper will eventually have to be paid. Math simply is and doesn't care.

Logan Mohtashami says

Are you serious here or are you joking?

serious. We need to cash out around $1.8T of the $2.8T in the SSTF over 10-15 years.

$200B/yr is not a big deal if the Fed prints, but the 1% and their corporations will cry bloody murder if we raise taxes any more on them, despite:

And 1994 showed we can't raise taxes on the masses any more.

Gee, how to square this circle.

Bellingham Bill says

Gee, how to square this circle.

The debt is going to grow and as long as it doesn't create bad inflation, we will be fine. :-)

meh

That inflation will be coming back as the demand goes up.

Logan Mohtashami says

There is no mathematical way to pay the debt off any time this century ....

But consider this. Debt is a credit card, if you are in a hole it's never easy to pay it off. But we just got to do it. Liberals think that we can just inflate it away, but that won't work, because that'll inflate the debt just as bad, and we'll be back to square 1. The only way out is to do the hard thing, tighten the belt and spend less than you make. Simple solution there, just hard to do without discipline.

Well after Paul Ryan's speech right now, he is off the data line

Logan Mohtashami says

Bellingham Bill says

Gee, how to square this circle.

The debt is going to grow and as long as it doesn't create bad inflation, we will be fine. :-)

Maybe your career is fine until then and you will have enough funds to retire, but when SS funds run out in the 2030s if no radical cuts are implemented most people won't be "fine". The harm done to the economy by making necessary cuts now is a piece of cake (even 2008 was a piece of cake) compared to the cuts (30%) and tax hikes suddenly necessary when SS becomes insolvent. Can't stump basic math, it just is. How'd you fix it..

mell says

SS funds run out in the 2030s

Don't worry about this, they will simply borrower to cover the cost like everything else the government does :-)

Logan Mohtashami says

mell says

SS funds run out in the 2030s

Don't worry about this, they will simply borrower to cover the cost like everything else the government does :-)

But they won't get out of the trap of having to service the debt, even with a globally favorable (low) rate environment for interest they barely make a blip in reducing the deficit and keep growing the principal. Eventually the currency will become worthless if they keep borrowing/printing and they have to start selling hard assets - which is what they are already doing by converting whole coastal cities into foreign owner dominated territory. I don't count on seeing much of the SS money and so do many others, that's why you see them chasing yield in the market casino(s).

If the Brits can survive ... we easily can!

mell says

but when SS funds run out in the 2030s

The SSTF is supposed to run out then-- it was built up by boomer FICA over-contributions ~1984-2014 and needs to be cashed out for these peoples' retirements preferably starting around now (boomers were age 20 to 38 in 1984 and are age 52-70 now) and running for the next 20-odd years.

Demographically SS is fine and as long as the SSTF can in fact be run down to its statutory minimum of 1 year's outgo, currently $900B:

https://research.stlouisfed.org/fred2/series/W823RC1

I think going forward our population and wage base can support its payouts indefinitely. And if not, we can just raise the FICA rate.

6.2% didn't come down from Mt Sinai.

mell says

Eventually the currency will become worthless if they keep borrowing/printing and they have to start selling hard assets

I do agree that

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

is rather troubling. $7.5T in the hole, though at least we've hit a bottoming here.

Bellingham Bill says

We didn't really pay down our ginormous WW2 debt either, but inflation took care of it for us in the 1970s.

Problem is, this time because of globalization (which was inevitable), it's hard to see that real wages will rise along with everything else, not that they did in the 70s, but it may be worse this time.

Logan Mohtashami says

If the Brits can survive ... we easily can!

Citing a high debt-to gdp-ratio during (almost) medieval and war times is not a really sound data point. The majority of countries with high debt-to-gdp in this (mostly) global peace era have significant problems. And even though they are not in the top-7 most indebted nations today Britain is certainly not the best place to live unless you're fairly wealthy.

Bellingham Bill says

I do agree that

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

is rather troubling. $7.5T in the hole, though at least we've hit a bottoming here.

We have been selling our most popular hard assets (purposefully without the usual scrutiny for large transactions) to them, doesn't feel like a solid game plan though..

http://www.nytimes.com/2016/04/13/world/americas/canada-vancouver-chinese-immigrant-wealth.html?smid=tw-share&_r=0

FortWayne says

Liberals think that we can just inflate it away, but that won't work, because that'll inflate the debt just as bad, and we'll be back to square 1.

Idiot. THe debt gets paid off with dollars that are worth less than the ones that were borrowed. Interest rates will go up on debt that is rolled over, but all the debt that is getting rolled over these days in to 10 and 30 year notes and bonds is at micro interest rates.

I would go on. But why don't you take a finance course or something. THe government can borrow seemingly infinite dollars for 10 years at 1.8% and for 30 years (yes 30 years !) at about 2.6% .

No wonder were running big deficits.

mell says

The majority of countries with high debt-to-gdp in this (mostly) global piece era have significant problems.

Last thing I am worried about in America is a debt blow up, honestly, list of issues to be concern about, but America having a debt blow up shouldn't be one of them