Millennials and the Obama Legacy

FederalDebtby Jon N. Hall10/4/16
In his 2008 campaign for president, candidate Obama said that the debt run up by Pres. Bush was “irresponsible” and “unpatriotic” and that Bush ran up the debt all “by his lonesome” (short video). Despite presiding over far more debt in his first term than Bush did in two, Pres. Obama was re-elected by young folks. It would seem that debt doesn’t really register with millennials. Although millennials may not be interested in debt, debt is interested in them.

On Oct. 1, 2016 the federal government will begin its next fiscal year, FY 2017. Fiscal 2017 will mark ten years since the last budget produced by a Republican Congress before the Democrats took over Congress in Jan. 2007. Enjoy it while it lasts, kids, because a year from now we’ll start rolling over the Democrat debt.

The ten-year anniversary of fiscal 2007 is significant because most of the federal debt is in instruments that have terms of ten years or shorter. The deficit for fiscal 2007 was -$160B. When Nancy Pelosi took over, the deficit exploded: in fiscal 2008 the deficit hit -$458B, a record, and in fiscal 2009 the deficit hit -$1,412B, another record. And then came three more trillion-dollar deficits. So, fiscal 2017 should be the lull before the storm, and a quarter of it will have elapsed before the swearing in of the next Congress. Enjoy.

People get hung up on the $19T “official” national debt; the figure is continually splashed all over the TV (especially if they’re selling gold). But what millennials need to be looking at harder is the “hard” debt, the debt held by the public. Let’s look at “Note 11. Federal Debt Securities Held by the Public and Accrued Interest” of the “2015 Financial Report of the United States Government” and see what the public debt consisted of on Sept. 30, 2015, the last day of fiscal 2015.

Marketable U.S. securities held by the public consist of Treasury bills, notes, bonds, treasury inflation-protected securities (TIPS), and floating rate notes (FRN). One year ago, on Sept.30, 2015, the grand total of these marketable U.S. securities came to $12,831.9 billion, or about $12.8T.

Of that $12.8+ trillion in marketable debt, only $1,688B is in Treasury Bonds, which have terms of 30 years. The more concerning entry is for Treasury Notes, whose longest term is 10 years. As of Sept. 30 last year, T-notes comprised $8,366B, or 65.2 percent of the marketable debt.

If these data don’t disturb you, perhaps a chart will do the trick. On page 21 of the GAO’s financial audit “Bureau of the Fiscal Service’s Fiscal Years 2015 and 2014 Schedules of Federal Debt,” we come to the “Debt Held by the Public” section where we see this chart:


This angry chart shows the nearness of our fiscal dilemma, and if it concerns you, read the “Debt Held by the Public” section of the GAO’s financial audit, which begins on page 21 of the PDF. In the second paragraph you’ll read this: “Of the marketable securities currently held by the public as of September 30, 2015, $7,408 billion, or 58 percent, will mature within the next four years.”

For contrast, if we go back to the GAO’s audit for fiscal 2007, and venture to the same “Debt Held by the Public” section (page 16), we read: “Of the marketable securities currently held by the public as of September 30, 2007, $2,838 billion or 64 percent will mature within the next 4 years.”

So, in eight years the amount of money needed to pay back Treasury securities over the next-four-year spans increased from $2.8T to $7.4T. But that’s not the worst of it. The four-year projection for Sept. 30, 2018, two years from now, will include the four trillion-dollar deficits that Nancy Pelosi is so proud of. My hunch is that the four-year projection in 2018 could be about $9T.

How is Treasury going to pay back those trillions in Obama era U.S. securities without causing inflation? If all the Treasury did was to pay back the maturing securities, it would be pumping trillions of new dollars into the economy. If that proved too inflationary, Treasury could roll over the maturing securities or sell new securities, sucking the money back out of the economy. But that would also be inflationary as it would jack up interest rates. Not only would the higher rates for U.S. securities increase the cost of debt service for the taxpayer, but those higher rates for T-notes and such would trickle down throughout the economy. Inflation seems inescapable and it should start ramping up one year from now, when the Democrat debt, their 10-year T-notes, starts coming due.

Millennials are responsible for the grim decade they face, as they provided the winning margins for Obama, Pelosi, & Co. Millennials have grown up with the Fed’s ZIRP, zero interest rate policy; they’ll be shocked when they finally face normal interest rates. Of all voting groups, it is young people, millennials, who should be demanding balanced budgets the most, for they are the ones who will be most affected by Obama’s “legacy” of debt. (Debt is interested in you, my fine-feathered young friends.)

The Obama Era is not just a lost decade. His legacy of irresponsible debt threatens the next decade and beyond. America cannot afford four more years of Obama, nor can she afford another Democrat Congress.

Jon N. Hall is a programmer/analyst from Kansas City. • (835 views)

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14 Responses to Millennials and the Obama Legacy

  1. Brad Nelson Brad Nelson says:

    Millennials are responsible for the grim decade they face, as they provided the winning margins for Obama, Pelosi, & Co. Millennials have grown up with the Fed’s ZIRP, zero interest rate policy; they’ll be shocked when they finally face normal interest rates.

    Millennials are like rats in a rat maze being tested to see how much baloney they can swallow down.

    They may be shocked (“may,” being the operative word) when they find out the cost of their “social justice,” environmental utopia, and social utopia.

    Odds are that the Democrats will simply roll out another scapegoat, blaming “the rich,” blaming “white privilege,” Republicans, conservatives, etc., for all the problems and offering further “Progressive” government as the answer. Hillary (and Trump) ought to be a laughing stock for the sheer mendacity of her lies.

    But she is not. The religion of Leftism (the Grand Narrative) trumps all…probably including Trump.

    • Tom Riehl Tom Riehl says:

      Just to beard the lion, Brad, I have to ask why Trump is included in the “religion”, since he has never wielded policy power?

      • Brad Nelson Brad Nelson says:

        Tom, re-read what I wrote. Although I do think Trump is a thorough East Coast Progressive, I didn’t write what you think I wrote. I think he could be swamped by the very more clear-cut Cardinal of Leftism, Hillary.

        Trump’s religion, if he has one, is his own ego. I posit that the religion of Leftism is so pervasive, it will be difficult for any other kind of politician to win. Imagine, for instance, a Christian trying to win an election in Saudi Arabia.

        • Tom Riehl Tom Riehl says:

          I did read it again, and lo and behold, you’re right! Sorry.

          The important thing to acknowledge of course is that leftism is truly a religion for its misguided adherents. One of my current idle pursuits is to invent a new, but short and catchy, name for the Leftist, Socialist, Progressive, Fascist and ruling internationalist oligarchy that bedevils our lives around the globe. I think about Trump versus this behemoth, this Hydra, and hope that he is at least the tip of a spear that will actually attack it with vigor, as opposed to the gentle little pokes that the GOPe have ritually used with all the due respect they give to comity-at-all-costs. Maybe Trump will change the dynamic so perfectly illuminated by Empress HRC and the likes of Ryan/McConnell. Or, we could be doomed! This is a rough ride…and I’m thankful for ST as a safe harbor for real thought.

          • Brad Nelson Brad Nelson says:

            My brother was just stuck in traffic because they’re building some kind of salmon passageway (under five lanes of traffic) and he said, “They can’t find money for schools, but they can spend millions on this crap.”

            Actually, they find plenty of millions for schools and it’s generally wasted…indoctrinating kids, for one thing, on environmental wackoism. Certainly some accommodations can, and should, be made regarding the natural world. But knowing the Left has no off button, I always fear the zealotry will feed even more zealotry and some day we’ll need permission to exit our houses lest we pollute the environment by just breathing.

            Leftism is a thoroughly materialistic and atheistic religion…including, if you ask me, the Kumbaya Christians who have substituted the core values of Leftism and placed them parasitically in their own churches.

            I certainly hope ST is a harbor for real thought. That’s the goal. We need to be more than just the mindless daily drama that is going on out there in the conservative press.

            • Timothy Lane says:

              No off button — a perfect description of one of the failings of liberalism. They have no concept of “too much of a good thing” (even if their ideas really were good things), no limit to their wants. Sorcerer’s apprentice, anyone?

              • David Ray says:

                Plato once asked “who’s teaching our children and what are they teaching them.”

                Hyperventilating leftist drama-queens are teaching successive generations, and this country is reaping the results.

                Good men gradually abdicated authority positions in schools’ and leftists filled the void.
                It’s the same in Germany, hence the Romeike’s came here to home-school their children. (They barely survived AG Holder to do so.)

  2. Timothy Lane says:

    As it happens, I came across an article today that reported a $1.42 trillion increase in the national debt over the past year, about half of that coming from pent-up borrowing when the debt limit was suspended late last year. The reason the easy money policy hasn’t been inflationary yet is that the velocity of money is so low. If we ever get a decent economy again (which might happen with Trump, though not with Slick Hilly), that will change.

    • Tom Riehl Tom Riehl says:

      Yeah, I saw that too, Timothy. Our best hope is robust growth. More real wealth might ameliorate some of the coming pain that is inevitable when our monetary system hits the wall of reality. The velocity of money will impact when that happens, but will never prevent it. Good observation.

    • Jon Hall says:

      Timothy and Tom, please, where’d you read this? The deficit for FY 2016 was supposed to be about $550 billion or so. I’m doubtful about your source.

      • Timothy Lane says:

        I was surprised, too. Half of it was pent-up borrowing from the previous fiscal year (held over due to the debt limit). Unfortunately, I got it from one of the updates I get in my e-mail, which I regularly delete after reading. I don’t remember which.

  3. David Ray says:

    Laborious article, but a damned good & beneficial one.

    Any here know the cost “per individual” of the current debt?
    I divided 20T among 320Mil and got $62,500. Then played with 20Mil illegal aliens removed from that number, but re-added 71% of that number that, jaw-droppingly, DRAW WELFARE CHECKS! (Glad to know my tax dollars aren’t being squandered.)

    I know that there’s some enthusiastic brain-trust here.
    Have/will any here took the liberty to play with that figure to hone it to some greater accuracy?
    BTW: Per person. Not per household. (with liberal criteria, that’s hard to define these days anyway.)

    Oh, and also . . . Can any confirm the “$67,000” figure that I’m told it takes to process every muslim refugee/future DNC voter/ jihadist trash?
    I’m told they’re getting sizable “start up” checks. Are they? (Might be better not to tell me. My blood’s boiling already.)

  4. Kung Fu Zu Kung Fu Zu says:

    This is part of the Obamanation’s true legacy. He commutes the sentence of an American soldier who was a traitor to his country. Another sign the Obamanation hates the U.S.A.

    Perhaps this will save the tax payers from picking up the bill for this creep’s sex change.

    • Brad Nelson Brad Nelson says:

      Any enemy of the U.S. military is a friend of Obama’s. Do millenials understand that state of mind? I doubt it. Hope we’re not jumping today from a community agitator to a strip club operator. Time will tell.

      Actually, as we conservatives understand, time doesn’t do its own telling. Usually hucksters, shysters, faux journalists, and grievance-minded (small-minded) people tell us all what happened. The days of “self-evidence” are long behind this entertainment-based culture that is used to letting others do their thinking.

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