How soon before Treasury goes bust?

Look back at my Spreads Over Time post, and the timing of the bust if fairly clear. Each time Treasury gets a spread, the debt cost goes up. What happens is the Federal delivery of checks to citizens goes into overdrive at the short end and has to be made up by larger promises of payments over longer time periods. This is the cost of operating the government supply chain out of entropy; a one time loss equal to the loss of entropy over the spread period.

After a bailout spread, the yields tighten up sooner at a lower overall yield, a classic debt/deflation cycle. The average yield at the top has been dropping from7 to 6 to 5, and will likely be 4% at the height of the recovery. Unfortunately, the human constant of Uncertainty is about 4%. To get a measure of the tolerable uncertainty band look at oil prices which are the most constrained input. They are varying over a 4.5% band since a month ago. We cannot get more accurate than that.

What happens when Congress cannot work the government supply chain with inventory variances at 4%? We get a federal deflation, a partial default. I predict the partial default should occur in 2015, five years from now and right at the steepest point of the current Treasury curve.