Biden officials disagree over their yield forecasts, which is significant. A reduction of 0.1 percentage points in the forecast rate, if applied across the budget’s entire decade forecast, lowers the cumulative deficit over the same pd by ~$300 billion t.co/0MVDNaRlAP
— Lisa Abramowicz (@lisaabramowicz1) March 7, 2024
While the world fixated on AI stocks, a silent storm brewed in the financial realm. In just four days, the US politicians orchestrated a borrowing spectacle, accumulating a staggering $100 billion. As the nation’s total debt catapults to a record $34.5 trillion, a rapid ascent of $11.2 trillion since 2020, questions arise about the sustainability of such fiscal dynamics.
Amidst the borrowing binge, Biden officials engage in a fiscal tug-of-war over yield forecasts, debating the implications of a mere 0.1 percentage point reduction. The magnitude becomes evident when applied across the budget’s decade forecast, shaving off approximately $300 billion. A curious paradox emerges—politicians patting themselves on the back for a purported $30 billion annual saving while the deficit balloons towards a potential $3 trillion for the fiscal year.
As the US debt inches towards $35 trillion, the urgency of sound fiscal decisions intensifies. The current trajectory hints at a stark reality—annual debt rollovers loom, overshadowing even defense spending. The hindsight lament of issuing short-term bonds instead of locking in low-interest rates with 30-year bonds echoes a missed opportunity. The fiscal saga unfolds, with each borrowed dollar carrying implications for the nation’s economic future.
While everyone was busy talking about AI stocks this week, the US borrowed another $100 BILLION in 4 days.
Currently, total US debt stands at a record $34.5 trillion, up $11.2 TRILLION since 2020.
At the current pace, the US deficit for this fiscal year will cross $3 trillion,… pic.twitter.com/q56QHyOuIx
— The Kobeissi Letter (@KobeissiLetter) March 2, 2024