Never Has U.S. Borrowed So Much for So Little: Chart of the ...

Page 1 of 2

Never Has U.S. Borrowed So Much for So Little: Chart of the Day

By Brendan Moynihan - Jan 27, 2011

The U.S. government has been borrowing record amounts of money, though with little effect on interest rates. That may be about to change, according to Nouriel Roubini, the New York University economist who predicted the 2008 financial crisis. The fiscal problem is very serious, Roubini said in a Bloomberg Television interview yesterday with Tom Keene from the World Economic Forum in Davos, Switzerland. The bond vigilantes have not yet woken up in the U.S. in the way they have in the euro zone. Unless the U.S. addresses this fiscal problem, were going to see a train wreck. The CHART OF THE DAY shows total U.S. public debt outstanding soaring to record highs and approaching its $14.3 trillion ceiling, while interest rates and debt-service costs as a percent of gross domestic product fall to record lows. The average maturity of U.S. marketable debt outstanding is five years.

Pacific Asset Management

Direct (206) 933-1600

Toll Free (877) 637-2767

Fax (206) 600-3175

http://www.bloomberg.com/news/print/2011-01-27/never-has-u-... 1/27/2011

Never Has U.S. Borrowed So Much for So Little: Chart of the ...

Page 2 of 2

Treasury Secretary Timothy F. Geithner said Jan. 6 that lawmakers must raise the federal borrowing ceiling in the first quarter or risk a default on U.S. debt and a loss of access to credit markets. Geithner said it will reach that level between March 31 and May 15. Economist Ed Yardeni coined the term bond vigilantes in 1983 for investors who protest inflationary monetary or fiscal policies by selling bonds and driving up government borrowing costs. To contact the reporters on this story: Brendan Moynihan in Chicago, Illinois, at bmoynihan@bloomberg.net To contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.net
2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.

This material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security/instrument, or to participate in any trading strategy. Any such offer would be made only after a prospective investor had completed its own independent investigation of the securities, instruments or transactions, and received all information it required to make its own investment decision, including, where applicable, a review of any offering circular or memorandum describing such security or instrument. That information would contain material information not contained herein and to which prospective participants are referred. This material is based on public information as of the specified date, and may be stale thereafter. We have no obligation to tell you when information herein may change. We make no representation or warranty with respect to the accuracy or completeness of this material. Pacific Asset Management (2011)

Pacific Asset Management

Direct (206) 933-1600

Toll Free (877) 637-2767

Fax (206) 600-3175

http://www.bloomberg.com/news/print/2011-01-27/never-has-u-... 1/27/2011