Congressional Budget Office projections

I’ve recently discover this mine of interesting information and just noticed this gem:

The projected cumulative deficit over the 2024–2033 period—$20.2 trillion

That will take US debt to over $50 trillion.

Who is going to buy this debt:

Major holders of United States Treasury bonds are selling off American debt at an alarming rate. Even the two major holders of U.S. Treasuries – Japan and China – are starting to sell off their holdings.

With this size of debt I’d want a rate of interest into double figures

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2023 = 33,825,514,153,851
2033 = 54,025,514,153,851
CAGR = 4.79%

The Captain

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Fifteen years ago the US’s three highest federal deficits on record, in inflation-adjusted dollars, were all from World War II. Since then, however, annual deficits have surpassed World War II levels 12 times, bumping wartime deficits down to 13th, 14th, and 15th in the record books. Somehow it has become routine for the federal government to rack up higher annual deficits than during a massive world-wide war.

DB2

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That’s what happens when you adopt one half of Keynesian economics, the spend part of tax (during good times) and spend (during bad times).

The Captain

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If the GDP grows at a CAGR of over 5% through that period, then we will be okay, or at least not in a worse situation than we are currently. The chances of that happening is relatively low. Even developing economies aren’t really exceeding 5% CAGR anymore.