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 …
Long-term interest rates are rising rapidly, with the 10-year Treasury pushing against 4 percent for the first time since the summer of 2008 – before the financial markets collapse. The many influences on U.S. interest rates at the moment are all moving in the same direction – up. One influence is the growing concern that inflation could become a major problem in the near future, and this is building into the inflation expectation components of interest rates. Another is simply the unwinding of the flight to safety following the initial …
The U.S. Treasury auction of long-term bonds on Thursday was “terrible”, in the words of one Wall Street economist, with the rate on the 30 year bond jumping from 4.1 to 4.3 percent. This is just the first sign that the debt-based Obama economic stimulus plan is about to become a major drag on the recovery, just as expected. The economic news is not all bad. We are seeing signs the rate of contraction is abating quickly, promising a bottom to the recession sometime this summer as many forecasters have …
The New York Times reports today: As the Obama administration racks up an unprecedented spending bill for bank bailouts, Detroit rescues, health care overhauls and stimulus plans, the bond market is starting to push up the cost of trillions of dollars in borrowing for the government. Last week, the yield on 10-year Treasury notes rose to its highest level since November, briefly touching 3.17 percent, a sign that investors are demanding larger returns on the masses of United States debt being issued to finance an economic recovery. … Already, in …
The credit crunch is hitting Washington, DC, as Uncle Sam maxes out his credit cards. In addition to the enormously costly Obama budget, all the multi-trillion dollar bailouts, stimulus, and government expansion plans depend on one thing—the ability of the U.S. government to get money and spend it. Uncle Sam gets his money from one of three ways: taxes, borrowing, or just printing more currency. Raising taxes during a recession is near-universally panned, except for the most die-hard liberals. The ability to borrow is now in trouble, after Wednesday’s effort …
We’ve warned before that the federal government’s exploding appetite for debt was helping to create a Global Government Debt Bubble. The Obama Administration has even been trying to worsen the problem by lobbying other countries to borrow even more money, despite the fact that our own record borrowing makes their borrowing more expensive. But national governments are not the only entities that issue debt. Nicole Gelinas writes in today’s Wall Street Journal: [State and local governments] should use the remaining $229 billion they’re getting in stimulus money to put their …
On Monday, if you accept the OECD’s figures, Britain’s public debt was 42% of GDP, or about 600 million pounds. Today, Britain’s public debt is about 142% of GDP, or about 2 trillion pounds. In one week, Britain’s debt has increased by 1.4 trillion pounds. That’s 2 trillion dollars of debt added in a single week. It’s likely the fastest, largest increase in net national indebtedness in the history of the world. What happened? On Thursday, Britain’s Office of National Statistics ruled that the Royal Bank of Scotland and Lloyds …
Last month Heritage fellow J.D. foster wrote: The global recession has caused deficits to balloon almost everywhere, and governments worldwide are considering their own massive programs to stimulate their economies. So the United States will be offering this great wave of federal debt to the credit markets while most other countries will be doing the same. Because interest rates are set on global markets, this even larger global wave of government debt is likely to have much greater interest rate effects than would be the case if the United States …
Last week, Moody’s Investors Service warned that the increase in U.S. debt caused by the ‘Economic Stimulus’ Act could hurt the country’s AAA credit rating. According to Moody’s the public debt as a percentage of the total economy (GDP) will jump 21.6 percent, up to 62.4 percent of GDP by 2010. That’s bad. But Britain’s even worse off. Its peril is a warning that the U.S. should heed. Yesterday, ratings agency Standard & Poor’s warned that it might have to review the top-notch score it gave to Britain’s credit only …
Last month Heritage fellow J.D. foster wrote: The global recession has caused deficits to balloon almost everywhere, and governments worldwide are considering their own massive programs to stimulate their economies. So the United States will be offering this great wave of federal debt to the credit markets while most other countries will be doing the same. Because interest rates are set on global markets, this even larger global wave of government debt is likely to have much greater interest rate effects than would be the case if the United States …
