Federal Debt Analysis
A Third Debt Crisis? No-one Paid the Federal Debt 21st Century Debt Analysis
Related Sites Deficits Inflation Unemployment See 2024-25 Economy 4/15/25
Twice this Century, theUS
Made Major Additions to Federal Debt.
Will 2025-6 Federal Budget Again Create a Major Debt Increase #3?
FED was doing well managing shock 2,
but then
Bond Market Problems of April 11, 2005
raised the stakes in Trump's poker game with the US/World economy.
So Trump held rather than raise and Xi began an Asian tour.
Uncharted Territory?
Until the 21st Century,
No-one Paid the
Federal Debt,
Modern Fiscal Policy Rolls it Forward
Federal Debt had little effect on Mom and Dad
who died in their late
80's.
Their Four Children, now all in their 80's, didn't have been little
efected.
If politicians let the Fed Res roll debt forward slowly,
my brothers 8 kids, now in their 50's, will not be effected.
|
End of Fiscal Year |
US Gross Debt as % of GDP | Question Answer |
|---|---|---|
| 1940 | 52.4 | No One |
| 1950 | 94.1 | |
| 1960 | 56.1 | |
| 1970 | 37.6 | |
| 1980 | 33.3 | No One |
| 1990 | 55.9 | |
| 2000 | 58 | TBD |
| 2010 | 86.5 | |
| 2020 | 120 |
Excess Money Printing Could
Cause
Inflation
Leading to Higher Interest Rates/Cost
They did it again for Covid Shutdown
Two Kinds
of Federal Debt
1. Bonds/Notes pay interest to owners.
2. Dollars pay no interest.
Transactions only occur in dollars, which the FED prints as needed.
Fed can print dollars, give to treasury to spend, all with no
interest.
The hitch: If we
have a big deficit in 2025-6,
the Fed Res may not be able to easily roll debt forward debt.
without paying high Interest rates.
This is new ground for the FED because interest rates ate much higher.
See 2024 Deficit Analysis or Candidate Tax Positions
History
US Federal Debt Began With War
FDR Used Debt to Feed People
Republicans Cut Taxes
Source The Long Story of U.S. Debt, From 1790 to 2011
Excess Money Printing Could
Cause
Inflation Leading to Higher Interest Rates/Cost
They did it again for Covid Shutdown
