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News Link • Economy - Economics USA

Wave of Debt Payments Facing U.S. Government

• NY Times
The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true. But that happy situation, aided by ultralow interest rates, may not last much longer.

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

1 Comments in Response to

Comment by Ed Price
Entered on:

Printing lots of paper money makes sense. While it makes the value of the dollar less, it also makes it easier for the Government to pay its bills. It devalues the debt right along with the devaluation of the money, because the debt figure is a constant amount, but the Government now has more to spend.

Just to live, companies must pay us more. If they don't, we won't be able to make it on our pay, and so it won't be worth working anymore. When we get more pay, our fixed debts that we personally owe seem to decrease because the monthly repayment becomes a smaller percent of our newly increased income.

Of course, when we all figure out that the IRS was just an quasi-legal Government money-making scam, and demand repayment from the Government, the amount we get back won't have the buying power it did when we paid it to the IRS. So, in essence, we get less value back.

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