"Everyone talks about the federal debt, but few, literally, know what they are talking about."

Commentary by Roger Erickson

A reminder of what Robert Eisner said, back in 1993.

Federal Debt by Robert Eisner

'Nuff said.

It's convoluted, but worth a read, by all citizens.

What some actually know never stops all the senseless talk, does it?

Now we're talking about closing down policy, over idle talk. Only in America!

There is no correlation between the level of Federal debt and interest rates...NONE!!!!

The Debt Doomsday crowd is wrong...AGAIN!!!

Sheesh...when will these guys get it???

Even "money printing" is not inflationary!

Every one of the Austrian, hard money, gold bugs,' debt freaks,' arguments are being decimated left and right.

Yesterday I showed you how there has been NO correlation between the rise in Federal debt and interest rates. A couple of weeks ago I showed how the dollar has gone UP since the Fed embarked on all its extraordinary monetary measures, which added several trillion in new reserves.
Now take a look at this.

Here's REAL money printing--the Federal debt--which increased by 2000% since 1980. THAT'S money printing! And look at what the Consumer Price Index...IT WENT DOWN!

Yet the Debt Doomsday, money printing freaks will still stick to their wrong arguments.

If the debt keeps going up interest rates will spike. Oops, well, yeah, it's coming. Don't worry, it's really, REALLY, going to happen. Soon...we promise!

Talk about a picture being worth 1,000 words. Take a look at this.

The Debt Doomsday crowd has been telling us, forever, that interest rates were going to spike if the Government's debt keeps growing. The debt went from $800 bln in 1980 to nearly $16 trillion now, and the rate on a 10yr Treasury went from 15% to 1.5%.

Enjoy and don't forget to send to your friends who keep warning you about the debt. (rates in red, right scale, debt in blue, left scale.)

Moody's gets moody

Moody's Investors Service on Wednesday warned that its top credit rating for the United States could be in jeopardy if lawmakers backtrack on $1.2 trillion in deficit cuts planned over 10 years.

The ratings firm said the failure of a U.S. congressional committee to reach an agreement on deficit reduction did not affect the Aaa rating, but any pullback from agreed automatic cuts to take effect starting in 2013 could prompt it to take action.

"While a change in the composition of the spending cuts would not be a major rating consideration, a reduction in the total amount that would increase the projected increase in federal debt over the coming decade could have negative rating implications," Moody's said in a statement.

Read the rest at The Huffington Post (Reuters article)

Moody's Warns United States Must Stay Serious About Deficit Reduction

Someone wake up the bond vigilantes and tell them that Moodys is concerned.

Hello, yields are hitting historical lows.

I sure hope the folks at the rating agencies don't trade bonds. Or maybe they do and are sowing disinformation. Pathetic. Looks like they are spending so much time over at Zero Hedge they are unable to distinguish reality anymore.

Congressman Paul Ryan should apologize to the American people!

This was posted on Warren Mosler's site. Warren says that Paul Ryan should apologize to the American people for his misleading comments on the debt.

Dear Congressman Ryan, Your response to the President Obama’s State of the Union address included something we’ve all heard a lot of ever since. You warned along the lines that that the US could become the next Greece, and be faced with some kind of a sudden financial crisis, where the world would no longer lend to us, interest rates would skyrocket, and the US, unable to spend, would be down on its knees before the IMF begging for the needed funding. And no one with any kind of national public forum took issue with you, including the President and the Democrats in Congress, who for all appearances quietly agreed and acted accordingly. Well, today, based on the near universal response to the S&P downgrade, everyone now knows, or should know, there is no such thing as the US becoming the next Greece. The overwhelming response to the S&P downgrade by everyone from Buffet to Greenspan, and most every financial and academic economist in the world was along the lines of: The US is the issuer of the dollar. It can print dollars. So it can always make timely payments without limit. THERE IS NO SOLVENCY ISSUE FOR THE US. There is no such thing as the US running out of dollars to spend. There is no such thing as the US being dependent on taxing or borrowing to get dollars to spend. Greece is very different. Greece, Ireland, Italy, and all the euro member nations, corporations, and households can’t print euro, any more than the US states, corporations, and households can print dollars. And so they are all indeed dependent on revenues from somewhere to be able to spend. So, Congressman Ryan, please apologize NOW for being so wrong and so misleading. There is no solvency risk for the US. The Fed is price setter for the interest rates for the US government and the banking system, not the market, just like the European Central Bank sets the interest rates for its banking system and its own debt. Congressman Ryan, your reasons for deficit reduction have vaporized. You see, the risk of overspending is inflation, not solvency. So if you want to argue for deficit reduction, apologize NOW, regroup, and come back with your next round of fear mongering about how the deficit can be inflationary, or something like that, and see how that flies.