National Debt: The Race to Ten Trillion
Submitted by
CalculatedRisk on Mon, 09/29/2008 - 1:27pm (106 comments)
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Chart pattern forming a major blow-off top.
Hello inflation.
emo?
Probably not first.
Today was a start, but the Republican party has a ways to go to fix 30 years of f*ckups.
damn it!
when do I win? My poor savings account ain't looking like such a bad investment now is it
CR, did we break a record for visitors online?
I would like $10,000,000,000,000.
Nemo nails it - hole in one!
Time goes by really quickly in an exponential.
Don't worry about it. Congress will take of this problem the same way they always do -- they'll raise the debt ceiling.
Same chart starting in 1992 please?
CR:
Thanks for always pointing out when do or do not start at zero.
It's just one small mark of the high level of intellectual honesty and rigor that you bring to the site.
Mike D
The War in Iraq is a massive unfunded liability!
"CR, did we break a record for visitors online?"
It got up over 2300.
thank god it isn't really money we're talking about, only the paper obligations of what was the federal reserve before the great crash of '08.
Something has gone terribly wrong. What ever happened to "saving for a rainy day"?
S&P -1.7 points after hours.
This is not what I would have expected after 100 point decline.
I read somewhere that the bailout plan included public sector pensions. Add them all up and the plan would be much more than $700 billion.
What happens when a politician can no longer deliver on voter promises / bribes?
War in Iraq is less than 4% of yearly Federal spending.
Periwinkle, I'm sure we did. I wish I had more to add ... I was just watching and wondering what is next.
Best Wishes.
CR,
Can you please show the debt as negative? This is the most important cliff diving chart there is in this world.
I don't see the problem as long as it doesn't exceed $1000 per person.
Let's add another $700B right away!
And then we can add more as time goes by. Let our bankers borrow as much as they need, we need credit to flow freely!!!!!
Too bad little of that was spent on productive assets.
"War in Iraq is less than 4% of yearly Federal spending."
Hmmmm....4% of federal spending could accomplish a lot more good than fighting idealists physically.
"...less than 4% of yearly Federal spending."
LOL, that little project costs way more than 130 bil a year or so, but nice try.
YouTube - Network - Mad as Hell Scene
Well, is this all shocking enough for you?
No time to sleep
Paulson to Work Quickly With Congress to Revive Plan
Paulson to Work Quickly With Congress to Revive Plan (Update1) - Bloomberg.com
Today was a start, but the Republican party has a ways to go to fix 30 years of f*ckups.
Mass suicide, Jonestown-style, would be a good step.
tyaresun, I suppose I could ... this is definitely cliff diving!
BTW, the deficit exploded at the start of the Depression too. Back then balancing the budget was considered critical, so Hoover kept raising taxes as the economy got worse and worse. I doubt that will happen this time.
Best WIshes.
I still think that the reason this package never had any traction is that there is a fundamental dishonesty in the conversation.
$895 billion increase! Not a peep from anyone about how to repay this, let alone service the interst.
I personally suspect the real unspoken crisis is the full faith and credit of the United States government. And, no one wants to talk about the austerity measures that'll be required - either voluntarily by our politicians, or involuntarily by the market.
I know what's next!
Paulson and Bernanke are gonna find a way to punish the shorts!
(I'm thinking of selling 50% of my remaining ultrashorts tomorrow... ugh)
"I don't see the problem as long as it doesn't exceed $1000 per person."
(10 trillion)/(250 million) = 40,000?
--
Let Americas Capitalists, Wealthiest 0.01%, Save Financials and Capitalism
Americas capitalists have more than $2Tr. (close to $4Tr.) in US Treasuries and money market. They can buy all the illiquid assets from banks and financial at a price the market would bear (arent they suppose to let the market determine the price?!).
ALL the trillions that the capitalists have made during the past dozen years has come as a result of PUSHING DEBT on households and taxpayers (federal and state debt).
There is no liquidity crisis in America. There is indeed a moral crisis. The wealthy are Crooks. Period.
Jas Jai
Persecuted Comrade Anonymouse, the sell off today was clearly the fault of short sellers.
Best to all.
Can you please show the debt as negative? This is the most important cliff diving chart there is in this world.
tyaresun
Just stand on your head
......
Nothingburger.
Reagan proved deficits don't matter.
Why don't they just raise the debt ceiling to $100 Trillion and be done with it. No more wasting Congress' time with such nonsense.
"Reagan proved deficits don't matter."
now there's a laffer
So what's going to happen at the next Treasury bill auction? Any predictions?
(and use a mirror)
....
Hugh Hefner on the verge of Bankruptcy!!!
"The 83-year-old has been told to lay off some of his staff at his Los Angeles and New York offices as soon as this month or go bankrupt.
The company has recently seen shares fall from £6.20 to £1.55. An insider at the company told the Daily Star that bosses had been aware of the worsening situation for "a while".
"Only the top brass has known for a while how bad things have been for Hef recently."
Spokeswoman Elizabeth Austin would not confirm the sackings, saying: "It is our policy not to comment on corporate matters such as employee issues."
fortunately we've "Refinanced" the debt from a ~5.1% average interest rate last year to a ~4.4% interest rate today (and still falling).
Oh wait, you mean rates can and will go up someday?
The National Debt is effectively on an ARM...
C&C,
Its official we're in a depression!
.....
I can see it now, all of our heros will be shacking up together -- Ed, Hugh...
And please take the parisan hackery posts back to redstate and kos. For the past few years some very very smart people have been posting here and you (we've) all but run them off.
Old Hugh Heffner had to let go of his staff... LOL
oh you should have let that one go.
"Paulson to Work Quickly With Congress to Revive Plan"
What part of NO does he not understand?
I looked into the eyes of the enemy and I saw fear. The enemy is Wall St.
Jas Jain (or anyone with SF Bay Area knowledge),
You've made some dire prognostications about SF Bay Area real estate.
So far, in the desirable towns, there has been little reversion to prices that "normal" people (without options or six-figure salaries) can afford.
Why do you think this is?
I've read recently that Option ARMs, I/O loans etc. are not common in the "good" neighborhoods here.
Do you have statistics that either refute or support this?
Thanks.
Hugh Hefner is suffering from ... deflation.
More Viagra!
It's a big number, i must admit. Still, I'd like to see it as a % of total GDP and how that compares historically and with other countries.
54th
War in Iraq has cost less than 4% of federal budget to this point (count 2003 to 2007).
This year's projected budget was 3.1 Trillion. War expected to cost
--
Revised (sorry, hit the submit button too soon)...
Let Americas Capitalists, Wealthiest 0.01%, Save Financials and Capitalism
Americas capitalists have more than $2Tr. (close to $4Tr.) in US Treasuries and money market. They can buy all the illiquid assets from banks and financials at a price the market would bear (arent they suppose to let the market determine the price?!).
ALL the trillions that the capitalists have made during the past dozen years have come, indirectly, as a result of PUSHING DEBT on households and taxpayers (federal and state debt).
There is no liquidity crisis in America. There is indeed a moral crisis. The wealthy are Crooks. Period. And born-and-bred American dopes allowed them by being Scam Lovers (the main source of Crooks wealth for the past dozen years).
America's problems have been very well-known, but they were covered up by propaganda and Pushing Debt.
It is the debt, Stupid!
Jas Jai
Heffner has to reverse a lifelong trend of laying on people in the sack. Now it's layoffs and sackings.
Confused-
US Credit Conditions - Federal Reserve Bank of New York
make sure to click Alt-A at the top right. enjoy the pretty colors!
sure, name, squeeze the math just right, ignore the overall DoD budget and deficit, and maybe a few palin supporters will buy it. those of us with a few working synapses know the ultimate cost will be +2 tril on the conservative side - and that doesn't begin to count the cost of caring for the potentially hundreds of thousands of PTSD cases we'll be taking care of for the next century.
Just in case you were worried the Treasury would run out of Tbonds to sell to provide cash!!!
CR, as I have emailed you in the past- please connect the dots to the dropping value of the dollar.
Next we get competitive devaluations versus the dollar, and a few holdouts that sell it off first.
Beggar thy neighbor is back as a nasty coda to the mercantilist credo.
Someday this war's gonna end...
Crispy,
last thread about this
WSJ, May 7, 2008:
WASHINGTON -- Treasury Secretary Henry Paulson said U.S. financial markets are emerging from the credit crunch and that "the worst is likely to be behind us," marking possibly the most optimistic comments yet from the Bush administration on the financial crisis.
The govt. who speaks of finacial armageddeon says weeks and months before that all is ok, storm is over..
Essentially keep buying stocks..
they lied, knew it was coming and no matter a bailout or not the market was going to drop..
impeachment is the best thing now..
people were duped by the govt...
With a heavy heart I believe this is going to be passed by friday with a different look and feel but basically the same..
you see this is a stock man running this show. for some reason I keep thinking that this was all planned, massive amount of money shorted by big boys who still can and when it passes a massive amount of money made again to look real good for qtrly's next year...
people who didn't do thier research and move out of stocks to a cash position should look to our president and admin. before they look at today's no in congress....
War in Iraq has cost less than 4% of federal budget to this point (count 2003 to 2007).
This year's projected budget was 3.1 Trillion. War expected to cost...
...was cut off...
... about 150 Billion. Getting toward 5%, though it looks like 3.1 Trillion will be revised up.
If you thing the war is the big budget problem, you are not paying any attention at all.
@Jas -
I agree, the elite capitalists should save the system. And they will, when the price is right. Adam Smith's invisible hand is doing its job, slowly but inexorably.
In the meantime, I think the problem is that some of those 0.01% are stuck with the bad debts, and the remainder don't want them. So the bagholders are squirming like mad.
Today's defeat of the bailout bill, despite the ominous market portents, was a victory for democracy and capitalism.
There's no way the wars only cost $150 B a year....don't they ask for more that in mid-year appropriations alone?
Does this mean.... no ponies?
Me sad.
Wisdom Seeker,
Actually, the Invisible Hand seems to have been pretty busy lately. So many banks, so little time.
Confused -
You should try asking Mr. Mortgage - he lives in the bay area.
But my understanding is that most homes bought in the last few years, even in the bay area, were bought with option-arms. But 'good' areas tend to have lower turnover, and thus fewer hybrid loans and low foreclosure numbers (so far).
Look, however, at the number of pending foreclosures in east San Ramon (Windemere), an otherwise 'good' area, but where most houses are under 5 years old. I suspect many of those were option-arms, since I really doubt that many people could afford a traditional 30-year on an $800k mortgage.
"If you thing the war is the big budget problem, you are not paying any attention at all."
true - it pales in comparison to the long-term effect of the medicare bill jammed through at 6 am by tom delay and el presidente a few years ago.
of all of the disasters wrought by this administration, our foreign misadventures (which have only served to empower our real enemies) are just a small part of the smorgasbord of cataclysm.
Congratulations, in advance, again.
Confused:
If the bay area is anything like the west side of LA, there are plenty of option ARMs and other funny Jumbos. Wachovia and First Federal sold bucketloads of these to move-up buyers and wannabe flippers.
"...at the number of pending foreclosures in east San Ramon (Windemere), an otherwise 'good' area"
uh, or not.
'good' = bubble-proof: more like prime SF, marin county, palo alto.
I for one wish our Chinese and Russian debtholders well, as they must now fully share the nervousness of all debt- and asset-holding Americans about the unpredictable behavior of our unstable government.
if freedom, then vigilance:
Congress.org - Get informed, get involved
keep it up!
O, ten trillion - thats hardly nuthin' - I'll be impressed when we each have ten trillion dollars of debt a piece (which should buy you a modest bugalow in LA). USA dollar - the new Italian lira. I remember when I was a youth and went to Italy and bought a pizza and a beer for ?60,000? or was it ?600,000? lira - thats the way to debauch your currency. Every man a millionaire - I say every man a zillionaire!!!
@Calculated Risk: "... I was just watching and wondering what is next."
CR, you mentioned before that you had received "hundreds" of alternative plan suggestions.
As long as we are just waiting to see what happens, perhaps you could seed us with some of the better ones, and we could work them over to see if we could come up with some consensus "better" ideas.
It might make for better reading than some of the chuff we are wading through these days...
Hugh Hefner on the verge of Bankruptcy!!!
Damn.
And I can't do any naked shorting.
Re: cost of war
Granted, this is not the most direct source of data, but their chart is good:
Cost of Iraq War 2008
Shows a little under 600 Billion for a little under 6 years.
The arguments that put cost into the trillions rely on the idea that it was all paid for with debt. No kidding. If you buy a Toyota Corrola on a bad car loan it costs the same as a BMW. Regardless, a Corolla costa about 20k and a beemer at least twice that.
My point here is: The war is good or the war is bad on its own merits, but the war is not what caused this financial crisis.
SPENDING on entitlements makes up about 50% of the federal budget.
10 terabucks, and my piece of it is about 40 kilobucks.
Can I at least get a pony too?
Name,
No matter where you stand on the war in Iraq, we can't afford it...
Ron Paul 06 or 07
the war is a waste of time, money and most importantly young people's lives...
'good' = bubble-proof
lol. So far. Let's re-visit that hypothesis in 12 months.
Anyway, I interpreted his 'good' as simply non-subprime. My definition would be areas of older desirable homes with long term residents and low turnover - as you say, Palo Alto, Atherton, San Francisco, Alamo, Marin. Less prone to rapid declines, but still not totally immune from a secular shift in home value perceptions. I think people will be surprised... but drops are coming.
--
Jas Jain (or anyone with SF Bay Area knowledge), You've made some dire prognostications about SF Bay Area real estate.
Confused,
You should have read my prediction about Silly.con Valley in 1999. NO ONE FORESAW waht happened during 2001-03 (EMPLOYMENT down 19.7%, peak to trough).
I will post on Silly.con Valley RRE and CRE some time in the future.
My prediction has been down 80%+ for the high-priced areas from the peak price. In these areas the PPSF would come down from $1,000-1,500 to $200-300. There is a chance that they will be down 90%!!!!!!!!!
Just wait to hear depression next year and Greater Depression in 2011.
Jas
@Calculated Risk (in previous thread): "... I was just watching and wondering what is next."
CR, you mentioned before that you had received "hundreds" of alternative plan suggestions.
As long as we are just waiting to see what happens, perhaps you could seed us with some of the better ones, and we could work them over to see if we could come up with some consensus "better" ideas.
It seems like the bail out plans currently on the table will well not go through.
And it might make for better reading than some of the chuff we are wading through these days in the comments ...
Jim Cramer is going to cry because the Wachovia CEO lied to him....waaaaaahhhhhh
Remember this is just the residential real estate problem. Next comes commercial biz loans and commercial real estate. 700 Billion is not even a drop in the proverbial bath tub.
Re: Cost of war
The emergency appropriation Bush tacks on AFTER/in addition to the budget passed by congress was estimated at $495 billion for 2008 halfway through the year. It primarily covers the cost of Afghanistan and Iraq. There are also other indirect costs like the accelerated depreciation of military equipment that show up in the regular pentagon budget. Any quote of a $600bn total figure is ridiculous. Don't forget that the Iraqi treasury was taken over by the US Coalition and used as a general fund for coalition forces.
Re: Debt as a % of GDP
Morgan Stanley/Fed Reserve/BEA via The Economist Magazine
http://media.economist.com/images/20080927/CFN118.gif
The Federal budget is one small piece of the total debt, and don't forget unfunded future obligations (how long do you wait until you tell the people Medicare has to be eliminated, or break the bad news that there is no money for state pensions in Texas)
Check this out: Great article written by Ben Stein in NYT in October 2007
EVERYBODY'S BUSINESS; The Gloomsayers Should Look Up - NY Times -
seems Paulson had this plan sitting in his back pocket since 2007.
Did someone just post a Ben Stein article???
War expected to cost about 150 Billion.
If you really believe that than you are beyond naive. Perhaps you watch too much CNBC?
Couple things to keep in mind about the "official" number.
1) It always gets revised up.
2) And even after that, they request more money from Congress.
3) This number doesn't include everything. I don't have the full list of commissions (I can dig it up if you'd like), but some of them are things like care of veterans, Blackwater operations, and some funds that are going to the Iraqi government.
Where's Goldilocks ?
"We are now in the golden age of thieves. And where I come from we put thieves in jail, we don't bail them out." Rep. Pete Visclosky, Democrat.
Indiana congressmen vote 6-3 against bailout bill |
WSBT - News, Weather, Sports
South Bend
| Campaign '08
"Hugh Hefner on the verge of Bankruptcy!!!"
No wonder his "girlfriends" are leaving him.
C'mon America! You can do it!
Go chase that evil marijuana plant around or something, that'll add $110-billion in no time flat.
kis,
Thanks. Do you have a pointer to Mr. Mortgage?
Jas,
I look forward to your article on RRE in SFBA.
Even Atherton has a median income of only about $250K, which should support a home price of $750K, not millions!
There is a disturbing upward convexity to that curve.
I really didn't believe that counter in Manhattan when I saw it at $9 trillion... can't believe one president managed to nearly double the govt deficit in 8 years.
Personally, I'm enraged because Peggy the Horse has been banned from the pub at the Alexandra Hotel in South Tyneside.
And all because the proprietor bought a new carpet.
What is this world coming to?
The new bailout proposal would lift the cap to $11.3 trillion. Just the thought makes my tuchus sore...
...debts don't matter... so no matter how much the war costs it doesn't matter, you people concerned about the costs and lives and cleansing obviously don't understand anything. When you have God on your side, none of the rest of the blood and guts and destruction matters......
Now shape up and support all pre-emptive wars.
U.S. National Debt Clock
Visit the website to see the race to $10 trillion. As of 30 September, its only 9,897 billion dollars.
War expected to cost about 150 Billion.
If you really believe that than you are beyond naive. Perhaps you watch too much CNBC?
Couple things to keep in mind about the "official" number.
1) It always gets revised up.
2) And even after that, they request more money from Congress.
3) This number doesn't include everything. I don't have the full list of commissions (I can dig it up if you'd like), but some of them are things like care of veterans, Blackwater operations, and some funds that are going to the Iraqi government.
There's also the cost of maintaining and replacing equipment, everything from firearms to tanks, Hummers and Strykers. The sandy desert environment is hard on them and of course some of them get blowed up every now and then.
Whether the cost of the war is 5% or 4% or 6% of the annual budget is almost immaterial... it's an unnecessary expense whose marginal cost is contributing substantially to the deficit.
Look at it this way: let's be charitable and assume that the war costs only $130 billion a year (we all know it's more than that...).
If the annual deficit is ~$450 billion (so much for 'fiscal conservatism'), then this war - which, again, is entirely unnecessary - is fully one-third of the deficit.
I really didn't believe that counter in Manhattan when I saw it at $9 trillion... can't believe one president managed to nearly double the govt deficit in 8 years.
ARRRRGH you are offending my English nazi!
the amount by which annual gov't spending exceeds annual gov't revenue is the DEFICIT.
the total amount of money owed by the government is the DEBT.
and yes, President George W. Fuckup has managed to nearly double the national debt in just 8 years.
And that's after having been handed an annual government SURPLUS.
Massive. Epic. Fail.
Ten trillion dollars in debt, scary isn't it? I'm glad I don't have my retirement money in the market. How about the others? Is there anything anybody can do except that bailout the congress can't agree on? There are a lot of smart financial people out there. They should step forward and do something about this.
Evelyn Guzman
Debt Challenger
Greetings,
The national debt is a concern for me as well and has been for years. The last eight years have been disappointing to say the least. We went from a balanced budget to absolute disarray in such a short time.
We have millions of households that haven't followed basic principals of finance that are now in disarray. Living paycheck to paycheck. Unprepared for the smallest curve life throws at them. And our government is following that same path.
If you are concerned about the debt, please take a minute to visit my site National Debt. It is a site focused on the national debt, education and trying to make an impact.
Thanks.