Net Funding Requirements of the US Government

For those concerned about the government’s ability to finance its burgeoning deficit, this chart (courtesy of Deutsche Bank) should go a long way in confirming that fear. My only response to this chart is “wow – good luck.” Unless we retreat into a massive recession or the Federal Reserve announces additional programs to significantly expand its balance sheet (even after tripling it to $2.3 trillion in 2009!), its hard to dispute the view that rates are going materially higher. Layer on the costs of Obamacare, the increasing likelihood of an expanded stimulus program, and an overhaul of our energy system, and we are really setting ourselves up for a fiscal nightmare.