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(Marketwatch)   Good news: U.S. Treasury to pay off $35 billion of debt for the first time in six years. Bad news: That's about the same effect on your mortgage as finding a nickel in your living room sofa   (articles.marketwatch.com) divider line 26
    More: Spiffy, Treasury Department  
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639 clicks; posted to Business » on 01 May 2013 at 8:38 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-05-01 08:46:03 AM
But I keep hearing every penny counts. Maybe if we defund the NIH we can find a quarter? PBS has definitely gotta go...
 
2013-05-01 08:51:49 AM
With 35 billion here, another 35 billion there and at some point it may become real money.
 
2013-05-01 08:52:46 AM
Yeah, but I can't borrow $40 billion from the world's biggest banks on a whim.
 
2013-05-01 09:09:46 AM

TabASlotB: But I keep hearing every penny counts. Maybe if we defund the NIH we can find a quarter? PBS has definitely gotta go...


Whatever you do, don't cut a penny from the "Defense" budget. There are scary brown people out there.....
 
2013-05-01 09:16:45 AM
With interest rates at 0%, roughly, we should be borrowing more, not paying it off. Perhaps refinancing would be the proper analogy.

/All comparisons to household budgets are idiotic
//Economics does not work that way
 
2013-05-01 09:18:38 AM
That's 175 years of NPR.
 
2013-05-01 09:26:16 AM

TabASlotB: But I keep hearing every penny counts. Maybe if we defund the NIH we can find a quarter? PBS has definitely gotta go...


What! We're still funding PBS! We could have paid off our debt five times over by now if we had taken Lord Romneys advice and got rid of it then. Do you know how many homeless people we could have fed on Big Bird alone! Obama truly is histories greatest monster.
 
2013-05-01 09:43:48 AM
I think I get what subby was trying to say, but what he did say leaves me wondering why I would expect the Treasury paying down debt to affect my mortgage.
 
2013-05-01 12:12:03 PM

thurstonxhowell: I think I get what subby was trying to say, but what he did say leaves me wondering why I would expect the Treasury paying down debt to affect my mortgage.


Poorly constructed subby's final sentence is.
 
2013-05-01 01:01:51 PM
Much like a deadbeat dad : "Sigh, it's not enough frank, but at least you're paying.."
 
2013-05-01 01:05:46 PM
>implying we need to pay off our debt
 
2013-05-01 01:08:57 PM
usually when i find a nickel in the couch, I smoke it.  Didn't know I could pay my mortgage with drugs.
 
2013-05-01 01:13:19 PM
You know, at this point why don't we just take up the habits of a highly effective debt avoider:

1) change the country's phone number
2) let all the other countries we owe money to know they have to contact us through our lawyer, who incidentally doesn't exist
3) Screen the phone calls, baby, screen.
4) pretend we're our older brother nation, USB (United States' Brother), and we haven't seen the US in weeks. But, we'll "totally let the US know that you called..."
5) eventually, when china's sick of our excuses, we'll give them california.
 
2013-05-01 02:57:31 PM

Lost Thought 00: With interest rates at 0%, roughly, we should be borrowing more, not paying it off. Perhaps refinancing would be the proper analogy.


That's what the Greeks said too!
 
2013-05-01 05:26:56 PM

Lost Thought 00: With interest rates at 0%, roughly, we should be borrowing more, not paying it off.


Yeah, so when interest rates normalize we can pay even more in interest.  Brilliant!

I bet you sign up for all of those temporary 0% credit cards as well right?
 
2013-05-01 05:31:05 PM

Lost Thought 00: All comparisons to household budgets are idiotic


Not all.  Yes,the goverment just has more flexibility in some circumstances.  In some ways, however; the goverment can get into financial trouble in much the same way as households can.  Namely, by prolonged spending beyond one's means.
 
2013-05-01 06:04:07 PM

hiker9999: Whatever you do, don't cut a penny from the "Defense" budget. There are scary brown people out there.....


That's not it.  The Defense budget supports the right kind of jobs, in which everyone's drug-tested and has their backgrounds checked.
 
2013-05-01 07:40:55 PM

hiker9999: Whatever you do, don't cut a penny from the "Defense" budget. There are scary brown people out there.....


Exactly. And also make sure to not cut a single cent from transfer payments, which are about 10x the defense budget every year. But scary brown people need welfare, too.
 
2013-05-01 08:32:14 PM

pkellmey: With 35 billion here, another 35 billion there and at some point it may become real money.


Interest alone on the national debt is $220 billion (which is actually a great rate given the size of the debt). $35 billion is a good start, but not enough to get us moving in the right direction longterm.
 
2013-05-01 08:55:07 PM

HeadLever: Lost Thought 00: With interest rates at 0%, roughly, we should be borrowing more, not paying it off.

Yeah, so when interest rates normalize we can pay even more in interest.  Brilliant!

I bet you sign up for all of those temporary 0% credit cards as well right?


This. If interest rates were 'normal' our current debt would turn us into Greece.
 
2013-05-01 10:02:05 PM

HeadLever: Lost Thought 00: With interest rates at 0%, roughly, we should be borrowing more, not paying it off.

Yeah, so when interest rates normalize we can pay even more in interest.  Brilliant!

I bet you sign up for all of those temporary 0% credit cards as well right?


pool.theinfosphere.org
 
2013-05-01 10:25:08 PM

TyrantII: [pool.theinfosphere.org image 624x352]


So when interest rates rise, our interest obligation on the debt does not rise?  Hmm, that one is news to me.
 
2013-05-01 10:44:36 PM

HeadLever: TyrantII: [pool.theinfosphere.org image 624x352]

So when interest rates rise, our interest obligation on the debt does not rise?  Hmm, that one is news to me.


Time to head back to Econ or a few MBA classes then.  Much of the debt we have issued has relatively long maturities, meaning that we have locked in these low rates. Now, while that won't apply to future deficit spending down the road, the good news there is we're both growing down the deficit, and we've made some rather large efforts of bringing it down in the short term.


Here's another surprise:
Another surprise is how little we are paying in interest on the federal debt, even though the debt is growing larger and larger. Right now, interest payments make up only about 6 percent of the federal budget. In addition, they have been decreasing as a share of the gross domestic product: the federal government spent about 1.5 percent of gross domestic product in paying interest on its debt on 2011, down from a peak of 3.3 percent in 1991.
 
2013-05-01 11:49:30 PM

TyrantII: Much of the debt we have issued has relatively long maturities, meaning that we have locked in these low rates.


True, but the debt is never repaid and will eventually roll over into the new interest bracket.  Some of that may be 5 years, 10 years or even longer.  However, it will evetually reset. According to the OMB our weighted average maturity is about 65 months.

Another surprise is how little we are paying in interest on the federal debt, even though the debt is growing larger and larger. Right now, interest payments make up only about 6 percent of the federal budget.

When you throw the intragovermenal debt in, that goes up to about 11.5%.   When you compare that to tax revenue, it eats up about 18%. That is nealy 1/5 of the entire federal tax reciepts going to pay our total interest obligation.
 
2013-05-01 11:52:01 PM
Bernanke is stepping down before the fan gets hit.
 
2013-05-02 12:48:51 AM
Just came to say that the $35b payment of (15% of yearly interest) would be like finding $600 in the couch.

Subby off by 12000%. :p
 
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