Discussion in 'Economy' started by DonKayrouz, Nov 21, 2009.
Formula found in french magazine
I tried to follow it, and am not certain that I understand it. Could be that I have had a couple of tall glasses of Merlot and am missing something.
What I do know is that as long as the FED is not taking the interest from Federal Bonds held, we are home free. We can borrow as much as we want and never have to pay interest on it. As long as that reality exists, we have noting to worry about from borrowing trillions. It is all free money.
If debt was unlimited, then Economics is a farce
I always used to believe that to be true until I asked how much money we pay the FED in interest and was told ZERO. Zilch, Nada, Nuttin! If you do not have to pay interest, then the loan of the money is essentially free. Am I right or wrong?
"During FY2008, the government also accrued a non-cash interest expense of $212 billion for intra-governmental debt, primarily the Social Security Trust Fund, for a total interest expense of $454 billion. This accrued interest is added to the Social Security Trust Fund and therefore the national debt each year and will be paid to Social Security recipients in the future."
Is that what u mean ?
anyway there is a serious problem my friend see wikipedia:
Interest expenses are projected to grow dramatically as the U.S. debt increases and interest rates rise from very low levels in 2009 to more typical historical levels. CBO estimates that nearly half of the debt increases over the 2009-2019 period will be due to interest.
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