I tried to think of a better title than the one that AceOfSpades is running (and they aren't using this one but the word appears in it) but the word, "DOOM" pretty much sums it up.
The
linked NRO article pretty much spells out what a debt spiral looks like and that we are already in it and that there is no way out.
To top it off, the guy in the NRO article, Bill Gross, who runs the world's biggest bond fund is currently
headlining on Drudge because he is dumping all of the fund's US debt.
From the NRO article, the last paragraph:
[blockquote]The result:
[blockquote]Under all three scenarios, interest costs would be higher than CBO estimated in its January baseline projections (see Table 2). The effects would be minimal for 2011. Between 2012 and 2021, though, interest payments under scenarios 1 and 3 would be about $1.1 trillion and $1.2 trillion higher, respectively, and under scenario 2, interest payments would be $5.4 trillion higher. The cumulative deficit and debt held by the public at the end of the 10-year period would rise by similar amounts. A small portion of the additional interest payments would be offset in most years by larger remittances by the Federal Reserve System on its earnings from holding Treasury securities, which are shown as added revenues in Table 2. The estimates in Table 2 do not account for possible effects on the deficit and debt of other differences in economic conditions that might accompany higher interest rates.[/blockquote]
The last sentence is important, because it basically says that
these projections, which show an explosion in the amount of money needed to service our debt, underestimate the problem, since any decrease in economic growth resulting from higher interest rates — or any other cause — is not accounted for. Bottom line:
This could be really bad.[/blockquote]