Article Image
News Link • Government Debt & Financing

Burning The Candle At Both Ends: Raising the Debt Ceiling, and QE3 To Infinity

This coming May 16, the U.S. Federal government debt ceiling will be breached; that is, the national credit card—currently topped at $14,294,000,000,000—will be maxed out. (Yeah, I know: It’s one thing to read “$14 trillion” and quite another to see the actual number, written out with all those zeroes.) It’s not like lighting farts . . . Shortly thereafter, the Federal Reserve’s policy colloquially known as Quantitative Easing-2 (QE-2)—whereby the Fed created $600,000,000,000 of new money, and used it to purchase Treasury bonds—will end. These two issues seem to be miles apart—notice, seem to be. But they are as intimately related as yin and yang—Mickey and Minnie—Ritz crackers and cheese. Both policies aim to prop up the sliding U.S. economy, each of them coming at this effort from different directions—one from the demand side, one from the supply side. And the suspension of either policy will result in the exact same thing—government shutdown, and default on the U.S. sovereign debt. Don’t believe me? Let’s look at them each in turn:

Join us on our Social Networks:


Share this page with your friends on your favorite social network: