Grant in FT again... is he a regular?? I'm starting to like that paper even better! Some key tidbits:
"Given the recent campaign rhetoric in which both major parties are advocating
legislative programmes that would tap into the ever-growing budget surplus,"
comments William V. Sullivan Jr, money-market economist at Morgan Stanley
Dean Witter, "most voters would no doubt be surprised to find out that the federal
government's overall debt loan continues to expand. Indeed, despite huge
liquidations of outstanding securities in the secondary market, total indebtedness
remains on an upward trajectory as non-marketable issuance continues to soar. The facts are in the public domain. The big government trust funds - notably, the
social security trust fund - currently take in more than they pay out. However, the
government relieves them of this surplus and spends it, courteously leaving
behind a marker, the aforementioned non-marketables. As these claims are not
negotiable outside government channels, they constitute no visible burden on the
public markets. Out of sight, out of mind."Actually, not quite out of sight. The non-marketable part of the debt, at about
$2,600bn, is almost as big as the marketable portion, at about $3,000bn. Over the
past two years, as Mr Sullivan notes, non-marketables have climbed by more than
the marketables have declined: a $439bn rise versus a $328bn fall. The
significance of the cumulative debt, $5,600bn, is that it is a scant $350bn below
the statutory debt ceiling.
DAK |
