Report: All Govt. Debt to Be Paid off by 2012

Great news! According to a recent report, the entire federal debt is scheduled to be paid off next year! From the report: "The debt held by the public comprises holdings by the Federal Reserve, foreign governments, and private investors; this is the debt scheduled for elimination by 2012." The report goes on to state "As the previous section described there are good reasons for our current fiscal... [more]

Great news! According to a recent report, the entire federal debt is scheduled to be paid off next year! From the report: "The debt held by the public comprises holdings by the Federal Reserve, foreign governments, and private investors; this is the debt scheduled for elimination by 2012." The report goes on to state "As the previous section described there are good reasons for our current fiscal discipline and the public savings that accompany it to continue. We must realize however, that a sharp reduction in" Federal debt and the possible accumulation of a Federal asset raises at least three important issues. First, investors looking for an asset free of credit risk can no longer count on an abundant supply of U.S. Treasury securities, and Treasury securities may no longer provide a reliable benchmark for other interest rates. Second, the Federal Reserve may have to change the mechanisms by which it conducts monetary policy. Third, continued surpluses after the public debt has been paid off will require the Federal. government to acquire assets; either directly or though the Social Security Trust Fund." You can read the rest of it here: http://media.npr.org/assets/img/2011/10/20/LifeAfterDebt.pdf Hold on a second. I'm now being told that the report was written in 2000 and did not factor in the Bush tax cuts, the Afghan war, the Iraq War, and Medicare Part D. Oh well. And I thought we were going to be completely debt free for a second! [less]