
Over $9T of Federal Debt Will Mature in the Next Four Years - Four_Star
https://thesoundingline.com/over-9-trillion-of-federal-debt-will-mature-in-the-next-four-years/
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andrewla
Looking at this number in a vacuum and not in light of total
spending/borrowing, and looking at it in a linear scale, makes this not as
interesting. To be clear, this is a huge number and generally government debt
is the problem. But this is a record amount of debt only because EVERY YEAR is
a record amount of debt.

The article says that this "represent[s] the fastest growth in the amount of
maturing debt since the Financial Crisis", but that's not true. Looking at the
numbers, this represents a 10.0% increase from the previous year but 2012 gave
us 10.7%. 2008, 2009, and 2010 represent bigger jumps, but you can argue that
the financial crisis extended to 2010 (although you can argue that it's still
not really over now -- definitions are hard). Pre-crisis we had 2003 13.5%,
2002 12.5%.

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brink
Am I wrong in thinking that this doesn't bode well for the value of the dollar
over time, and will likely cause hyperinflation?

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baron816
Yes, you are wrong that it will likely cause hyperinflation. Even if the Fed
simply monetized that debt (which it won’t do) you might get some inflation,
but nothing close to HYPERinflation. What’s more likely, as the article
states, is that more investor money will go to the government rather than
mortgages or commercial loans, which will slow the economy, drive up interest
rates, and potentially cause deflation.

~~~
hylaride
A lot of the new bonds will _replace_ what's already been loaned to the
government, so what will matter is the delta between the interest rates on the
old bonds and new ones as well as whether the new bonds have different
maturity times. So how much rolling the debt over will drive up interest rates
is debatable though the issuance of new debt to finance the current deficit is
more likely to do that.

Of course, that assumes that there are buyers for the rolled over debt. The
biggest source of financing over the past 20 years (China) isn't exactly happy
with the US government right now. That could drive up interest rates on the
bonds and cause problems.

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nafey
Feels like Wile E. Coyote who has sped off the cliff but will keep going until
he inevitably looks downward.

~~~
Four_Star
Indeed

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perfunctory
Why is this a news? Doesn't federal debt mature all the time?

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caprese
it isn't, someone wrote about it on an irrelevant site, someone posted it here
and it trends here

it just opens the discussion on this general topic, but nothing really about
the specific thing being discussed

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vwarner1411
Can someone ELI5 what this means?

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harryh
The US Government spends more money than it takes in taxes. In order to
finance the difference it takes out loans (in many ways just like you might
take out a loan to buy something). These loans take the form of government
bonds.

Various people/organizations buy these bonds and give the US government money.
Later on these bonds "mature" and those people get their money back plus some
interest.

This post is saying that about 9 trillion dollars worth of these bonds will
mature in the next 4 years so the US government will need to come up with that
much money to pay the bondholders. The way the government does this (for the
most part) is by "rolling over" the debt. This means the government will issue
new bonds that pay out at some point in the future.

In some ways this is actually great for the government because interest rates
are at very low levels right now, which means the new bonds will (in most
cases) have a lower interest rate than the old ones.

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SCAQTony
One buyer, in particular, most likely will stop buying and that is China.

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JamesCoyne
Have they made that threat?

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swarnie_
Not to my knowledge, its all just speculation.

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antr
It will simply be refinanced, like all other debt with sizeable balloon
payments. The underlying problem is not the so much the maturity, which can
create liquidity issues, but the continued use of debt to finance government
deficits.

~~~
vkou
This is not a problem as long as the RoI on spending is possible, or as long
as the dollar value of the economy is expected to grow, through population
growth, productivity gains, or inflation.

A government budget is not a household budget, and the same rules don't apply
to it.

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drocer88
_" If you have the right people, like, in the agencies and the various people
that do the balancing ... you can cut the numbers by two pennies and three
pennies and balance a budget quickly and have a stronger and better country."_

-Trump

 _" I’m pledging to cut the deficit by half by the end of my first term in
office."_

-Obama

 _" We must balance the federal budget. We can do so without raising taxes.
What we need to do is impose spending discipline."_

-George W. Bush

[ Bill Clinton and Newt Gingrich actually did briefly balance the budget ]

"Balancing the budget is a little like protecting your virtue: You just have
to learn to say 'no'".

-Reagan

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agildehaus
Obama did cut the deficit in half. More than half. At least over the course of
his entire presidency, not sure about the first term.

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karl11
He did, but only after he doubled it his first couple years.

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bilbo0s
Well, again, in fairness, that was because the global economy had been run
into the ground. The situation he stepped into had little to do with him.

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leereeves
He did vote in favor of the bank bailout (as a Senator) so the large deficit
in 2009 did have a little to do with him.

~~~
bilbo0s
Yes.

But that assumes that the global economy had been run into the ground because
of the bank bailouts. This is not the case. The situation these leaders were
presented with left them with few options.

The time to act with complete freedom of movement would have been _before_ the
crash. Once the crash happens, your options are severely restricted.

~~~
leereeves
The bankers who were bailed out were the very people who ran the economy into
the ground. The government could have unwound the situation without bailing
them out.

But the relevant point for this discussion is: that was a one-time event and
not a fair comparison with future deficits.

Deficits from later years should be compared to 2008 or 2007, or to 2009's
budget without the bank bailouts.

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ianai
This discussion is so twisted with incorrect and downright offensive to proper
reasoning rhetoric. Please look up modern monetary theory. Stephanie Kelton
explained modern governmental finance very well in a pod cast on Tuesday last
week with Chris Hayes. Basically, if the government runs a deficit then there
is a surplus somewhere in the economy that otherwise wouldn’t be. The recent
trillion dollar tax cuts and lack of resulting inflation underscore their
point.

The US and world economies are enumerated with USD - a fiat currency. The
government says “you may pay your debts with our currency” and only they
supply it. Which means all money comes from the government and only the
government.

~~~
AnimalMuppet
You seem to be assuming that MMT is The Correct Theory. That's... well, at a
minimum, it's not an assumption that you should expect your readers to
automatically recognize as correct as soon as you state it. In fact, it might
take more than one podcast to convince people.

For that matter, even Paul Krugman (a great friend of government spending
freely) thinks MMT is very wrong.

~~~
ianai
I made a claim and supplied a reference for defense of the claim. Their claim
is much closer to the true operations of government finance than the
prevailing perceptions. They discuss Paul Krugman’s and Larry Summers’
criticisms in the podcast.

multiple political cycles have been dominated by demonstrably false claims and
those claims have been used to refute proper understanding and progress. It’s
important to refute and push back against such dismissive rhetoric.

~~~
AnimalMuppet
> Their claim is much closer to the true operations of government finance than
> the prevailing perceptions.

Um... yeah, I want to see a bit more than a podcast as evidence of that
assertion.

> multiple political cycles have been dominated by demonstrably false claims
> and those claims have been used to refute proper understanding and progress.
> It’s important to refute and push back against such dismissive rhetoric.

It takes a lot more than you have supplied to push back. That's not
"dismissive". That's reality.

And, "demonstrably false claims"? Absolutely, there have been a bunch, from a
bunch of different sides. All the more reason we should want a bit more
evidence than a podcast from last week before we believe MMT.

