Even as policy wonks are calling for the U.S. federal government to turn away from monetary policy and “austerity”, Treasury debt outstanding has already seen massive annual increases since 2007, and not just in the US but around the entire world, Bloomberg market strategist Chris Maloney writes.
Which brings us to this week’s report on the U.S. federal government’s monthly budget statement. As Maloney puts it, “for eight-plus years now the U.S. federal government’s fiscal policy has been one of unprecedented deficit spending, pushing total debt to $15.3t from $6.1t (a 153% increase); this excludes ~$5.1t intra-govt debt holdings.”
Yet GDP since the end of Jan. 2008-June 2009 recession has averaged just 2.1%, below the 2.7% average seen from 2000-2007 while the last five quarters have seen a steady drop from 3.3% to 1.2%.
Meanwhile, debt has continued its relentless rise higher, pushing the ratio of US government debt/GDP to an all time post World War II high of 105%.
Continue reading “About That Upcoming “Fiscal Stimulus” – It Is Already Running Full Blast”