Thursday, March 10, 2016

The impact of extraordinary measures

From the Fed flow of funds: 
State and local government debt was unchanged in the fourth quarter, down from an annual growth rate of 1.7 percent in the previous quarter.
Federal government debt increased 18.5 percent at a seasonally adjusted annual rate in the fourth quarter, which was due primarily to the restoration of government trust funds that had been depleted as part of of the Treasury’s “extraordinary measures” during the 2015 debt limit impasse. 
Congress has no reserves. hence it dumps debt in bunches.  It is not a philosophy, it is fact.  Congress no longer works, they are stifled by entitlement restrictions and need the Fed to finance them short term. And when the Kanosians want infrastructure spending what they get is more entitlement and pension expenses, they are deliberate frauds

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