Treasury Secretary Yellen Says Higher Interest Rates Would Be Good For The Country

[Hoodat]

The principle debt lives on.

If the bond is retired when it becomes due, and no new bond is issued, then the principle debt does not live on.  Each annual budget appropriates money for the retirement of bonds due that year.  If the government plans to roll over that debt, then it must borrow the money it needs to retire that debt (thus replacing it with a new debt, which is NOT balancing the budget).

[DB]

If the bond is retired when it becomes due, and no new bond is issued, then the principle debt does not live on.  Each annual budget appropriates money for the retirement of bonds due that year.  If the government plans to roll over that debt, then it must borrow the money it needs to retire that debt (thus replacing it with a new debt, which is NOT balancing the budget).

You have a lot ifs in all that.

The fact is our debt is growing at the rate we are borrowing/printing. None of it is being retired. If it were our total debt wouldn't be growing at the rate of each year's borrowing. It only grows and isn't being payed back.

[Hoodat]

You have a lot ifs in all that.

No, there is only one 'if'.  'If' the budget was balanced.  And you continue to tell me why it won't work when the budget is not balanced.

The fact is our debt is growing at the rate we are borrowing/printing. None of it is being retired.

That's because the budget isn't balanced. If it were, then the debt would be going down each year.

[DB]

No, there is only one 'if'.  'If' the budget was balanced.  And you continue to tell me why it won't work when the budget is not balanced.


That's because the budget isn't balanced. If it were, then the debt would be going down each year.

It isn't balanced. Hasn't been balanced and likely will never be balanced for any length of time. Your "if it is balanced" balanced is a hypothetical that isn't going to happen in reality. So what's the point? If, if, if...

And for that matter we don't even have budgets anymore for planned spending. When's the last time congress even past an actual budget - a constitutional requirement? Everything is a "continuing resolution" to keep paying our bills. We are way off the rails economically and it is rapidly getting worse. So fantasy ifs don't mean much to me.

[DB]

BTW @Hoodat, this isn't personal with you, I'm just grumpy with all the unchecked insanity going around right now. I don't see how we avoid a major breakdown of society in the next few years.

[andy58-in-nh]

BTW @Hoodat, this isn't personal with you, I'm just grumpy with all the unchecked insanity going around right now. I don't see how we avoid a major breakdown of society in the next few years.

I work in the financial services industry (30+ years) and you are correct. The point missed throughout is that if interest rates rise, then the debt service currently being financed by fiat currency and quasi-governmental bond purchases becomes untenable, and massive inflation would be one of the results - leading to far, far worse

And yes, Janet Yellen knows this. What you are hearing from her and other members of the institutional global elite are the opening chords of the "Great Reset".

They are just trying to make us think that it's all for the best.

It is not. Unless you like the idea of being a serf.   

[IsailedawayfromFR]

I work in the financial services industry (30+ years) and you are correct. The point missed throughout is that if interest rates rise, then the debt service currently being financed by fiat currency and quasi-governmental bond purchases becomes untenable, and massive inflation would be one of the results - leading to far, far worse

And yes, Janet Yellen knows this. What you are hearing from her and other members of the institutional global elite are the opening chords of the "Great Reset".

They are just trying to make us think that it's all for the best.

It is not. Unless you like the idea of being a serf.

Actually, it is entirely incorrect.  @Hoodat says IF we balance the budget we would not only have receipts coming in to pay for the yearly costs, but we would also accommodate to pay off the principal of any debt that might become due that year that matured.

That is what he is saying is truly balanced.  Anything else is not.

The rest of what you say is spot on.

[Smokin Joe]

Only if one incurs new debt.

Will not impact anyone say having a mortgage with a locked in rate.

The folks who got suckered into variable rates are the ones who are going to hurt, along with those deep into their plastic.

Unfortunately, everyone who owns a home will be impacted.
With inflation, housing prices go up, with reassessment, taxes.

[Smokin Joe]

BTW @Hoodat, this isn't personal with you, I'm just grumpy with all the unchecked insanity going around right now. I don't see how we avoid a major breakdown of society in the next few years.

Between social and economic issues, it is virtually unavoidable. It will get ugly before it gets better.

[Hoodat]

BTW @Hoodat, this isn't personal with you, I'm just grumpy with all the unchecked insanity going around right now. I don't see how we avoid a major breakdown of society in the next few years.

We avoid a major breakdown by balancing the budget. All that would take would be to limit federal spending to 19% of GDP.  Do it for 20 years in a row, and the entire national debt is eliminated.

[DB]

We avoid a major breakdown by balancing the budget. All that would take would be to limit federal spending to 19% of GDP.  Do it for 20 years in a row, and the entire national debt is eliminated.

But it isn't going to happen. A majority don't even think we have a spending problem. They are determined to carry it to the bitter end.

[Free Vulcan]

I work in the financial services industry (30+ years) and you are correct. The point missed throughout is that if interest rates rise, then the debt service currently being financed by fiat currency and quasi-governmental bond purchases becomes untenable, and massive inflation would be one of the results - leading to far, far worse

And yes, Janet Yellen knows this. What you are hearing from her and other members of the institutional global elite are the opening chords of the "Great Reset".

They are just trying to make us think that it's all for the best.

It is not. Unless you like the idea of being a serf.

And if you're a holder of one of those cheap interest bills, notes, or bonds, when rates rise, those become less valuable. If it gets out of hand everyone will start dumping them, spiking things even higher.

Let's not even get into foreign holdings and the resulting currency issues. If that spirals out of control, then we will no longer be the worlds reserve currency, and then it really gets Venezuela ugly.