• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • The Debt Bubble Continues To Inflate

    Politico has picked up on a story we’ve been following for some time. Eamon Javers reports:

    “We’re looking at continuous monstrous issuances of federal debt, and it is only a matter of time before appetites are filled up,” said Tad DeHaven, a budget analyst at the CATO Institute, a libertarian think tank. “There’s a finite amount of debt that the market’s willing to purchase.”

    “The debt bubble continues to inflate,” said J.D. Foster, a former official in the Bush administration’s Office of Management and Budget who is now a senior fellow at The Heritage Foundation. Foster predicts that the global market’s appetite for American and other government debt will erode as governments continue to shovel bonds at less and less willing investors. “Who knows the whims of mass psychology?” said Foster. “You know it’s going to happen; you just don’t know when.”

    Even the left is beginning to acknowledge the debt threat:

    Although fear of a debt crash is generally most acute on the political right, at least one prominent liberal — former Clinton administration Secretary of Labor Robert Reich — thinks there is a “kernel” of concern that’s “plausible.”

    “At some point, global investors are going to get nervous about U.S. borrowing and demand higher interest rates on their loans to Uncle Sam,” he said. “There’s no question that large projected deficits will spook global investors, and they will either dump dollars or demand higher interest rates.”

    Posted in Economics [slideshow_deploy]

    5 Responses to The Debt Bubble Continues To Inflate

    1. Eduardo, Brazil says:

      What may happen? Best scenario, the expenditure is cut to an appropriate level. Middle scenario: interests raise up to levels of 79-80 or higher. Worst scenario: USA svereign default

    2. albert,campbellsvill says:

      hussein is so big on all these czars he should appoint one called the cut spending via waste and fraud.there is so much we just dont need or could easily do without and people downright stealing from us.we could save 10s if not 100s of billions a year,there has to be adverse consequenses down the road.

    3. Pingback: » Financial News Update - 07/23/09 NoisyRoom.net: Where liberty dwells, there is my country…

    4. Spiritof76 says:

      It is not a question of if but a question of when. Just add up all the debts so far plus all the unfunded liabilities which will unravel over time. Social Security is expected to go negative cah flow in 2016 closely followed by the government-run senior citizen health insurance called, Medicare.

      Get ready for double digit unemployment, interest rates and inflation.

    5. hollytoddybeamgirl says:

      Hi there,

      Straight wanted to noise abroad hello to all ya here!!!

      Please include me know how I can contribute best.

      Talk to you later.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.