“Clever debt management strategy can’t completely substitute for prudent fiscal policy.”
“What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”
From a New York Times article, Wave of Debt Payments Facing U.S. Government, more below:
Even the New York Times is taking notice of reality.
I report and link. You decide. - BJon
Some trust in chariots, and some in horses: but we will remember the name of the LORD our God. - Psalms 20:7
More from a New York Times article, Wave of Debt Payments Facing U.S. Government:
PAYBACK TIME [/] Wave of Debt Payments Facing U.S. Government [/] By EDMUND L. ANDREWS [/] November 23, 2009
WASHINGTON — The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true. [/] But that happy situation, aided by ultralow interest rates, may not last much longer. [/] Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.
Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.
[...] Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.
[...] “The government is on teaser rates,” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates lower deficits. “We’re taking out a huge mortgage right now, but we won’t feel the pain until later.”
[...] The problem, many analysts say, is that record government deficits have arrived just as the long-feared explosion begins in spending on benefits under Medicare and Social Security. The nation’s oldest baby boomers are approaching 65, setting off what experts have warned for years will be a fiscal nightmare for the government.
“What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”
[...] This month, the Treasury Department’s private-sector advisory committee on debt management warned of the risks ahead. [/] “Inflation, higher interest rate and rollover risk should be the primary concerns,” declared the Treasury Borrowing Advisory Committee, a group of market experts that provide guidance to the government, on Nov. 4. [/] “Clever debt management strategy,” the group said, “can’t completely substitute for prudent fiscal policy.” [My ellipses and emphasis]
