Sunday, August 14, 2011

If each state had to pay for its Senators' debt share

$14.5T/100 = $145B per Senator.  Maine would have to cover $290B in debt. Their GDP is $50B, debt to GDP = 5.5, their debt service about 20% of GDP.

So we have this demand for safe assets, Treasury bonds, as in this article:
10-year Treasuries ended the weak at 2.125%, historic lows. The world is screaming for more US government debt. And with the US getting older, the domestic demand for savings vehicles (like Treasuries) is only going to grow. Business Insider

The provision of debt service comes from Texas, California, Florida and the Great Lakes. Midatlantic does the business of central government, it is always askew. If one of the regions falters or rebels, the game is over. California, right now, is header for the crapper.

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