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So, what's the LONGEST time frame before the dollar collapses? At some point, the interest payment on the debt will simply be too big and we'll default.

So, how long can the US govt play this game? 5 years? Could they stretch it to 20 years?
Most T-bills are 10 year maturities. Around 2004-06 is when BushCo couldn't shove the things out the door fast enough, to pay for the wars. Also, the Chinese hold a lot of that old paper. So maybe another couple years before China demands another big redemption. If we survive that, there's the 20 year bonds. It's possible that the crash of 08 was caused when some of Reagan's old paper came due, and nobody had the cash.
 

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Most T-bills are 10 year maturities. Around 2004-06 is when BushCo couldn't shove the things out the door fast enough, to pay for the wars. Also, the Chinese hold a lot of that old paper. So maybe another couple years before China demands another big redemption. If we survive that, there's the 20 year bonds. It's possible that the crash of 08 was caused when some of Reagan's old paper came due, and nobody had the cash.
Right now you're getting unbelievably low interest rates on your Gubby bonds ...

3% repayment rate ..

It's usually up around 6%.

--

Assuming Romney is business-as-usual, you could arrive at 2017 with $22 Trillion in public debt. If he's worse, maybe up to $25 Trillion.

3% of $22t = $660 Billion per year, just in repayments on the public debt. Thats equivalent to your military budget sans warfighting.

All future trends put you guys DEEP in the red for years, and you haven't even felt it yet. Wait until the austerity begins ... Then we'll really see it kick off.





ps

thank you for reminding me of the big picture. i was temporarily brain-programmed by the mainstream media telling me about "double dip recessions" and "shaky recovery", I almost forgot about the above.
 

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The original post is nonsense. Government could balance the budget this afternoon if they wanted to. The spending levels aren't constitutionally mandated. All spending is a matter of law and the government can bend the law into a pretzel any time they want to.

Balancing the budget might create more problems than it would solve. Or it might cause everyone in government to lose their jobs due to public backlash to the spending cuts. Or we might be defending the country with our best wishes instead of troops. But the budget can be balanced.

The problem we face is that not enough people in and out of government want to balance the budget.
 

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So, what's the LONGEST time frame before the dollar collapses? At some point, the interest payment on the debt will simply be too big and we'll default.

So, how long can the US govt play this game? 5 years? Could they stretch it to 20 years?
Congress put it at around 2017, but that is without agitant factors, and not accounting for irrational international money flows.

ie. if EU is doing bad, people buy US assets instead, making the USD appear better than it otherwise should be.

Lots of variables, but I cant see much past 2017.
 

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The original post is nonsense. Government could balance the budget this afternoon if they wanted to. The spending levels aren't constitutionally mandated. All spending is a matter of law and the government can bend the law into a pretzel any time they want to.

Balancing the budget might create more problems than it would solve. Or it might cause everyone in government to lose their jobs due to public backlash to the spending cuts. Or we might be defending the country with our best wishes instead of troops. But the budget can be balanced.

The problem we face is that not enough people in and out of government want to balance the budget.
You could balance the budget overnight, as long as you're cool with 40% U-3 unemployment.
 

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You could balance the budget overnight, as long as you're cool with 40% U-3 unemployment.
I think that's what I said. However, if you fire the staff that collects and publishes unemployment numbers first, it'll take a while for everyone to catch on to how bad it is. ;)

More seriously, I've seen proposals over the decades on how to approach an all-at-once elimination of the deficit with an eye toward minimizing the resultant disruptions. I'd personally prefer a 2-3 year phase out of many things like farm subsidies rather than all at once but I don't think an all at once approach necessarily has to be catastrophic.
 

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So, what's the LONGEST time frame before the dollar collapses? At some point, the interest payment on the debt will simply be too big and we'll default.

So, how long can the US govt play this game? 5 years? Could they stretch it to 20 years?
Just saw a provocative vid by an economist named Wiedemar. His prediction:

Starts next year

No hyperinflation, but about 100 percent annually

25 percent unemployment

Definitely in favor of gold purchases, even silver.

Who knows. But he had a lot of figures to back him up.
 

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So, what's the LONGEST time frame before the dollar collapses? At some point, the interest payment on the debt will simply be too big and we'll default.

So, how long can the US govt play this game? 5 years? Could they stretch it to 20 years?
i say 2030 at the absolute longest...
 

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"On track" would do it for me. If we could devise a plan -- it would take both parties -- to eliminate the debt by, say, 2037, we could all rest easy. As long as one party believes that we can solve the problem by taxing the rich, it won't happen. it is going to crash, both will be blamed, but the Dems the more. If Republcans win, plus the Senate, the govt could do what needs to be done. Then the Dems would sweep back in because nobody could stand the pain.

As Hemingway might say, We are well and truly f**ked."
 

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where would we be if we defaulted on all the bonds owned by china and all other countries, even allies like japan, britan, but kept them for american owners ???

of course this ruins our credit, and guess what, we cant borrow any more money...yea !!

if we did this and trimmed, not destroyed entitlements

would it be enough to save our butt ???
 

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where would we be if we defaulted on all the bonds owned by china and all other countries, even allies like japan, britan, but kept them for american owners ???

of course this ruins our credit, and guess what, we cant borrow any more money...yea !!

if we did this and trimmed, not destroyed entitlements

would it be enough to save our butt ???
I think the more likely plan the government would try would be to hyperinflate our way out of the debt crisis. If a trillion dollars will only buy a loaf of bread, the government splits seventeen loaves of bread among our creditors and our debt is "paid off".

Of course no one would want to loan the US government any money again for decades but thems the breaks.

For debtholders who are US citizens the government would probably make the "rich" take the full hit of the devaluation loss then try to work out some compensation program for others.

After the debt is paid off, the US cancels the current US dollar treasury notes and re-issues a new currency.

That's basically the route the Germans took after WWI. A lot of the German's problems were worsened because Germany at the time was a weak nation and potentially faced a renewal of the war if they blatantly ripped off the Allied powers like that. So they had to slow-roll the whole thing which caused the international problems plus gutted their domestic economy for years. In theory if you did everything really quickly and with a wink and nod let the markets know the sleight of hand in advance, it wouldn't cause anything more than a deep recession.

I don't think that welshing on our debt is the route to go. But if we do welsh, doing it over a holiday weekend as an accounting trick seems better than most schemes.
 
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