Federal Debt Analysis
A Third Debt Crisis? No one Pays the Federal Debt
21st Century Could Be Different
A Little Economic History
Related Sites
Deficits
Inflation
Unemployment
See
2024-25 Economy
5/12/25
A Third Debt
Crisis?
2025
to be
Growth Without Excess Borrowing
Through the 20th
Century,
No-one Has Paid the
Federal Debt,
Modern Fiscal Policy Rolled 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.
We Just Grow it into Insignificance
US Has Grown Out of Debt Before
21st
Century Could Be Differents
Interest Expense Could be High
The
real
interest expense on the
net
federal debt
driven by
rising interest rates
and
increasing debt levels is expected to be
$881 billion.
Market
Issues of April 11, 2025
raised the interest expense stakes
in Trump's poker game with the US/World economy.
So Trump held rather than raise and Xi began an Asian tour.
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
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
