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4-3-18 Rising Debt Troubles the Markets

Nearing Midnight: Rising Debt Troubles the Markets - Todd Strandberg -
http://www.raptureready.com/category/nearing-midnight/
 
The US Deficit spending is completely out of control. Over the past 8 years alone, the national Debt has risen by 8% each year, while the economy has grown by 2% each year. The only factor that has saved us from financial calamity is the government's ability to print more money to pay for the shortfall.
 
There have been some efforts at budget reform. Tea Party Republicans arrived in Washington seven years ago with a clear, loud message from angry voters: Slash spending. The best solution Congress has been able to devise is short-term freezes on new spending. Several debt limits have been set and quickly violated. Once the government ran out of money, lawmakers would set a higher debt-limit target with a new promise of reform.
 
The Treasury Department would use budgetary tricks to keep the National Debt at the same level for several months. Once a new spending bill was passed that raised the debt limit, our total debt would go up by several hundred billion in a single day. On August 6 of last year, the debt rose by $318 billion. On the 7th of this month, it rose by $175 billion.
 
Because the fiscal year ends on September 30, the Treasury has been able to make our annual deficit appear smaller by moving the debt to the next calendar year. The government claims that our deficit was only $438, $585, and $665 billion over the past three fiscal years. The actual deficit never dropped below $600 billion. Two years ago, the national debt was $1.6 Trillion below where it is now, which means an annual shortfall of $800 billion.
 
We have had huge deficits for so long, the folks in Washington DC are no longer bothering to hide the red ink. In December, they cut taxes by $1.2 trillion and made no effort to balance the revenue loss with spending cuts. They just passed a spending bill that will add $300 billion to the national debt. Trump wants to spend another $1 trillion on roads and bridges.
 
The President's budget office is tasked with the responsibility of producing a budget projection for the next year. The spending numbers are always too low because they are based on wildly optimistic guesses on revenue and spending that typically promises to balance the budget in 10 years. President Donald Trump has just proposed a $4 trillion-plus budget for next year that projects a $1 trillion federal deficit and makes no promise to ever balance the federal ledger.
 
The White House budget projects that we will reach an unprecedented $30 trillion in 2028. Since it is seemingly impossible to maintain positive growth for a decade, the actual debt will most likely be $40 trillion.
 
It's absolutely stunning that we are having $1 trillion deficits in a time of positive growth. During the next recession, our deficits will easily be $2 to $3 trillion. The current forecast has Moody's, one of our key rating firms, warning that it may have to downgrade our debt.
 
The ability of our government to double our national debt once every decade would seem to indicate that we have discovered the secret to never-ending financial prosperity. All nations that have engaged in this level of reckless deficit spending have had their currency destroyed by hyperinflation. The only thing that seems different about our case is the extreme methods the Treasury and Federal Reserve governors have utilized to avoid calamity.
 
There are signs that we are running out of options. The Dow Jones suffered two thousand-point declines in recent days. Traders became concerned about the recent rise in interest rates and inflation. The 10-year bond is getting very close to the 3% mark. Soaring bond rates would mean higher interest costs for the government. When you have a debt of $20 trillion, an increase of just a few percentage points could make it impossible for us to service that debt.
 
The Treasury is at the point where it needs to convince bondholders to roll over $1.4 trillion, and find buyers for a fresh $1 trillion in new bonds each year. If rates rise sharply, people will suffer huge losses on their bonds, making it unlikely for them to buy more.
 
The only explanation for why the debt market has not collapsed is Bible Prophecy. God seems to be setting the world up for a major economic disaster that will allow the Antichrist to step in as a financial savior. Until the time is right, He will hold things together. Because we are in such a profound state of financial peril, I think time is very short.
 
"And the second beast required all people small and great, rich and poor, free and slave, to receive a mark on their right hand or on their forehead, that no one could buy or sell unless he had the mark-the name of the beast or the number of its name" (Revelation 13:16-17).


This post first appeared on ARE WE LIVING IN THE END TIMES, please read the originial post: here

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4-3-18 Rising Debt Troubles the Markets

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