US Budget deficit
America’s sovereign-debt spiral
People keep asking me,
“When is the crisis you’re predicting going to happen?”
US Budget deficit
‘No idea’ of when market might view debt as too large, says president of the bipartisan Committee for a Responsible Federal Budget
It is “political suicide” to advocate deficit reduction
Förra året hade den federala staten knappt 7 000 miljarder dollar i utgifter men bara 5 000 miljarder i inkomster.
Under högkonjunktur, alltså.
US deficit near 8pc of GDP. A global accident waiting to happen. America will keep spending money like a drunken sailor until the world stops funding it
Washington’s unchecked borrowing is evidence of a decadent society that has lost all self-discipline
America’s budget is already in an awful state;
must roll over debt worth nearly $9trn (30% of GDP).
RE: Problemet doldes länge genom att räntan var nära noll. När lånen som togs då skall rullas runt med stigande räntor blir det inte så roligt.
Bond vigilantes
The term was originally coined by former EF Hutton economist Edward Yardeni
The concept was later immortalised by James Carville, an aide to President Bill Clinton who in 1994 ruefully wished he could be reincarnated as the bond market so he could “intimidate everybody”.
For the past two decades there has been little sign of the vigilantes
After the April 9 tariffs had gone into effect, the yields on bonds that mature over 30 years rose above 5% — a two-year high.
When Trump declared the pause, they came down to about 4.8%. To economist Ed Yardeni, Trump’s U-turn was another victory of many for “bond vigilantes” — investors who sell off bonds to pressure a government to change what they see as reckless management of the economy.
“The Bond Vigilantes have struck again,” wrote Yardeni
Bloomberg 24 April 2025
As of last June, foreigners held $7 trillion of Treasury bonds. The federal budget deficit is running at around $2 trillion a year
So the U.S. needs foreigners to keep rolling over the bonds they hold, and buying new ones.
Särskilt besviken var hon på utskottets ordförande som såg den federala budgeten som om den vore en resultaträkning i hans skoaffär. Ett underskott i budgeten vore som om hans företag gick med förlust.
Hon berättar också om att Obamas rådgivare ville ha ett stimulanspaket på minst 1,3 trillion för att undvika en utdragen recession. Andra rådgivare ansåg, förmodligen med rätta, att ingenting som slutade på “trillion” skulle gå igenom i kongressen.
In the end, Obama lost his nerv”, skrev hon. Det blev 787 miljoner i stimulanser – och en långvarig recession.
Tillbaka till Rolfs länktips 25 april 2025
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