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Did you see, have you read the article on the front page of the New York Times today? I know, Pat, you ‑‑ I know you love to read the New York Times.
PAT: Oh, I can't start my day without it, can't start the day.
GLENN: Can you start your day without the New York Times, Stu? I mean, who can, who could possibly get up and start without the New York Times?
STU: They are totally still printing it.
GLENN: Today. So here it is. Monday, November 23rd, 2009, here is the headline in the New York Times. Now, remember ‑‑ and I'd love ‑‑ Stu, because you've been with me for a long time. Dan, you can verify as well. How long have I been saying these specific things and ridiculed for them? Dateline, Washington, from today's front page, A‑1, New York Times. Dateline Washington: The United States government is financing its more than a trillion dollars a year borrowing with IOUs on terms that seem to be too good to be true. But that happy situation, aided by ultra low interest rates, might not last much longer. Treasury officials now face a Trifecta of headaches.
I mean, this could have been written by me.
A mountain of new debt, a balloon of short‑term borrowings that come due in the months ahead.
Do you remember I said look at the treasuries: Nobody's buying long‑term treasuries. Do you remember that? How do we refinance this debt? Short‑term borrowings that come due in the months ahead and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed. Even as treasury officials are racing to lock in today's low rates by exchanging short‑term borrowings for long‑term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.
I said this on Thursday, those very words: We're creating the housing crisis on a massive governmental scale! With national debt now topping $12 trillion, the White House estimates that the government's tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year. Even if the annual budget deficit shrinks drastically, it will still be $700 billion a year. Other forecasters say the figure could be much higher. In concrete terms, an additional $500 billion a year in interest would total more than the combined federal budgets this year, education, energy, Homeland Security, and both wars in Iraq and Afghanistan. That is interest only.
The surge in borrowing over the last year or two is widely judged to have been necessary response to the financial crisis and the deep recession, and there is still a raging debate over how aggressively to bring down deficits over the next few years, but there is little doubt that the United States' long term budget crisis is becoming too big to postpone. Americans now have to climb out of two deep holes: Debt‑loaded consumers whose personal wealth shrank, along with the housing and stock prices; and taxpayers whose government debt has doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode. The competing demands could deepen political battles over the size and role of government. The tradeoffs between taxes and spending. The choices between helping ‑‑ listen to this: The choices between helping older generations versus younger ones.
Let me read it to you again: The choices between helping older generations versus younger ones. And a bottom ‑‑ continue to Page A‑4. Hang on just a second. And bottom line questions about who should ultimately shoulder the burden. The government is on teaser rates, Robert Bixby, executive director for Concord Coalition, blah, blah‑blah. We're taking out a huge mortgage right now and we won't feel the pain until later. So far the demand for treasury securities from investors and other world governments remains strong enough to hold down the interest rates that the United States has to offer to sell them. Indeed the government paid less interest on its debt this year than 2008, although it added $2 trillion in debt. It goes on and on and on.
Let me give you some perspective. Do you remember, do you remember how much debate we had over the TARP bill, over the stimulus bill, how we screamed that this, we cannot afford this TARP bill. We creamed, we cannot afford the stimulus package. $700,000 ‑‑ $700 billion in stimulus money? For what? What is it going to create? And now we're saying all of that money lost, jobs created, 400 phantom districts! Give you perspective. This is one stimulus bill guaranteed to create zero jobs every single year. It is the interest payment only. That's TARP, or the stimulus bill. Some say could be the healthcare bill. "Only going to cost a trillion dollars." Every single year, for nothing.