Obama Will Leave $20 Trillion Debt Crisis For Clinton Or Trump

[unknown]

Obama Will Leave $20 Trillion Debt Crisis For Clinton Or Trump

http://www.zerohedge.com/news/2016-08-29/obama-will-leave-20-trillion-debt-crisis-clinton-or-trump

GoldCore
Aug 29, 2016 7:54 AM

President Obama is set to leave a massive near $20 trillion debt crisis for his successor - be that Hillary Clinton or Donald Trump.

The U.S. national debt reached $19.5 trillion last week and has been increasing by roughly $1 trillion a year during his Presidency and during the so called "recovery" as the U.S. government continues to spend money like a drunken sailor.

During Obama’s presidency, the total national debt has risen from $10.6 trillion to nearly $20 trillion - see Debt Clock here. There is also the not insignificant matter of the between $100 trillion and $150 trillion in unfunded liabilities - for medicare, medicaid and social security.

{.. snip ..}

[unknown]

When Clinton or Trump takes the oath of office on Jan. 20, he or she will owe those investors nearly $20 trillion. Right now, the debt amounts to $60,100 for every man, woman and child in the country.
 

This is going to be truly a mess. Someone has said that Obama is sabotaging the next president with an economic time bomb.

The next president with be Hillary or Trump. Each one will implement different ways to handle this mess.

[dfwgator]

This is going to be truly a mess. Someone has said that Obama is sabotaging the next president with an economic time bomb.

The next president with be Hillary or Trump. Each one will implement different ways to handle this mess.

The only question is, which one does Obama despise more?

[Free Vulcan]

The article misses the boat though. We pay about $400B a year in interest cost at an average rate of 2% with a 6y average maturity.

If that number were to go to 8% and stay there, interest costs go to $1.6T a year. Our current budget is roughly $3.5T, so that's almost half.

Our biggest spending categories are military and social programs. Imagine if those were cut nearly in half...

[Sanguine]

The only question is, which one does Obama despise more?

Just a wild guess on my part, but I suspect HRC.  I think he deeply, deeply despises her.

[dfwgator]

Just a wild guess on my part, but I suspect HRC.  I think he deeply, deeply despises her.

That's why he didn't want to go down to Louisiana.

[Cripplecreek]

Just a wild guess on my part, but I suspect HRC.  I think he deeply, deeply despises her.

Doesn't really matter how he feels about her. Republicans have already given her the win.

It didn't help that Trump is also promising bigger government and more spending.

[unknown]

The article misses the boat though. We pay about $400B a year in interest cost at an average rate of 2% with a 6y average maturity.

I am not sure the article missed the boat. The article doesn't give solutions, it just says there is a mess and gives some numbers. Unless you are saying that the article says that there is a mess, and there really isn't a mess; which could be true based on numbers such as yours.

I have been hearing more and more about this "economic time bomb" that Obama is leaving. But as I read more and more regarding analyses such as yours and elsewhere, I start to question just how much of an economic mess it really is. Just showing raw numbers is difficult in making any rational decision. Showing proportions would be a better way of determining if there is really a problem or not.

For instance, I have really got a hold of the P/E (or PE10) as a measure of value for the stock market. This proportion removes all inflation (which can be manipulated) and other single values to create something historically to compare. Other proportions I follow are: silver to gold ratio, S&P to gold, property value to income, etc...

So if I can find a good Debt to X ratio for historical comparison I will interested in studying that.

[Night Hides Not]

Doesn't really matter how he feels about her. Republicans have already given her the win.

It didn't help that Trump is also promising bigger government and more spending.

Didn't Trump propose spending twice as much on infrastructure as Hillary? When did building roads, bridges, etc. become solely a federal responsibility?

[dfwgator]

Well at least with Trump, it will be entertaining,  Hillary is just plain boring.

[Free Vulcan]

I am not sure the article missed the boat. The article doesn't give solutions, it just says there is a mess and gives some numbers. Unless you are saying that the article says that there is a mess, and there really isn't a mess; which could be true based on numbers such as yours.

I have been hearing more and more about this "economic time bomb" that Obama is leaving. But as I read more and more regarding analyses such as yours and elsewhere, I start to question just how much of an economic mess it really is. Just showing raw numbers is difficult in making any rational decision. Showing proportions would be a better way of determining if there is really a problem or not.

For instance, I have really got a hold of the P/E (or PE10) as a measure of value for the stock market. This proportion removes all inflation (which can be manipulated) and other single values to create something historically to compare. Other proportions I follow are: silver to gold ratio, S&P to gold, property value to income, etc...

So if I can find a good Debt to X ratio for historical comparison I will interested in studying that.

I'm thinking strictly on a cash flow basis. If we have half our budget going to interest, then the rest gets half of what they had. Unless someone thinks that money will be loaned to our govt to pay off that interest, we will be in a major cash squeeze.

That IMO is the central issue of our debt level - how long can we maintain the cash flow to pay the interest?

[Free Vulcan]

Another thing to look at is that govt inflows from taxes and such are below what we spend because we run deficits, so our interest cost to receipts is higher than interest to spending. Right now I think interest is about 20% of receipts.

Then there's the next recession. If it is as bad as the last in terms of less revenue and more spending, we will be running $2T deficits this time. Even at 2%, the increase in interest v. the lost revenue will push that ratio much higher.

It could be a very rapidly exploding situation happening over a very few short years, and we're in a world of hurt. Worst part is it could create a vicious cycle that feeds on itself and unwinds even more rapidly as time goes on.

[geronl]

neither candidate thinks the debt is a big problem

[Sanguine]

neither candidate thinks the debt is a big problem

Yep.  Someone's going to be really surprised.

[LMAO]

neither candidate thinks the debt is a big problem

@geronl

Sadly, so very true.

They seem to want to fight over which candidate is the most racist

[XenaLee]

Another thing to look at is that govt inflows from taxes and such are below what we spend because we run deficits, so our interest cost to receipts is higher than interest to spending. Right now I think interest is about 20% of receipts.

Then there's the next recession. If it is as bad as the last in terms of less revenue and more spending, we will be running $2T deficits this time. Even at 2%, the increase in interest v. the lost revenue will push that ratio much higher.

It could be a very rapidly exploding situation happening over a very few short years, and we're in a world of hurt. Worst part is it could create a vicious cycle that feeds on itself and unwinds even more rapidly as time goes on.

A rapidly escalating snowball (or in this case, crapball) effect will lead to complete collapse (as planned and intended by the radical Obama leftists).  It's a matter of when now, not if.

[XenaLee]

Yep.  Someone's going to be really surprised.

The only ones that will be surprised are the LIVs.  The Cloward-Piven Obama leftists will be counting on it.

[LMAO]

A rapidly escalating snowball (or in this case, crapball) effect will lead to complete collapse (as planned and intended by the radical Obama leftists).  It's a matter of when now, not if.

@XenaLee


As of now, we are in the calm before the storm as the rest of the world is in worse shape than us. Plus the fact we can print money and  still are the world reserve currency helps.

The big worry is the next inevitable recession. What will a recession that follows a period  of one of the worse recoveries look like?

[dfwgator]

They seem to want to fight over which candidate is the most racist

"Nevermind that s--t, here comes Mongo!"

[XenaLee]

@XenaLee


As of now, we are in the calm before the storm as the rest of the world is in worse shape than us. Plus the fact we can print money and  still are the world reserve currency helps.

The big worry is the next inevitable recession. What will a recession that follows a period  of one of the worse recoveries look like?

Weimar, 1923?

[geronl]

"Nevermind that s--t, here comes Mongo!"

Now I have to change all my passwords thanks. jeesh.

[geronl]

Preppers and hoarders will be enemies of the state and barter will be taxed.