Saturday, January 26, 2013

Crisis in 2036

Here is a new deficit projection I created:


I see a crisis once net interest expense exceeds 5% of GDP, and this will occur in 2036 in this model.  I'm calling this Model L-2, and it is similar to one I did last year.  See http://aftermath2022.blogspot.com/2012/06/interest-rates-explode-after-2029.html.

One of the major differences is that I foresee the Federal Reserve intervening much more and buying up government debt in an attempt to keep the interests costs down.

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According to the latest CBO projections, my Medicare projections are too high and my Medicaid projections are too low.

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