Uncle Sol Starting a thought farm

An Explosion of Debt

I posted an article this morning at the Return of the Great Depression blog on the recent growth of the national debt.

Amid these turbulent economic times we have seen many changes, not least of which is the change in the U.S. National Debt. The debt, which has been steadily climbing since the beginning of the last century, has, of late, taken an unprecedented surge.

We don't often think too much about the national debt. After all, if you are like me, in your mid thirties, then the fact that the government is in debt and the debt is growing is a fact of life. It's been that way all your life, all your parent's lives and all your grandparent's lives. You hear some noise about it now and then, but it hasn't seemed like anything really bad has ever come of it.

The real trouble here is not only the fact that we're in debt, but how much the debt has grown recently. It's very difficult for us to think in terms of trillions of dollars. The number is so large that our minds can't really grasp it. The closest I can come to getting a feel for it is when I think of a trillion dollars as being a million million dollars. I still don't think it really gives you a powerful enough grasp of it, but at least you can begin to taste it. And now we're adding trillions of dollars to the debt as if there were, literally, no tomorrow.

And that's where the question comes in. Will there be a tomorrow? Not included in this article because I couldn't find any corroborating sources (I couldn't find any contradictory sources either, I'm finding this information very difficult to come by) was a report I saw on Max Keiser where one of his guests states that the bulk of the debt over the past 18 months has been comprised of two year treasury bills. Now, just because the bill matures in two years does not mean that the owner will attempt to cash it in in two years, but as our economy worsens and holders of debt begin to doubt the ability of the borrower to pay, the likelihood that these will be cashed in greatly increases. And with over $2 Trillion in debt incurred over those 18 months, that is an awfully big price to pay in a very short time.

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