Mayor Bloomberg: “people do seem willing to lend us an infinite amount of money”

I just read this at politicker about some interesting comments by New York’s Mayor Bloomberg. He, like pretty much all of the elites seem to be under the impression that the US government can in fact borrow an infinite amount of money. If you believe in fairy tales…just like the Mayor, well, then I would encourage you keep loaning Uncle Sam Money at near zero rates. Get back to me in 10 years and let me know how that works out for you.
About a month ago in “Uncle Madoff’s Trust Fund” I wrote:
“It never ceases to amaze me that we as a nation trust our government, run by universally despised politicians with our personal wellbeing in retirement.”
I think the same needs to be said about US debt. Since my days in college, I can remember being told over and over by professor after professor…. the market assumes that US debt is risk free. This is a fundamental assumption for modern economics and finance….but let’s think about how moronic that is. Who is the US government? It is us…only led by a bunch of morons who can’t even write or pass a budget, much less balance one. The number of budget surplus’s our nation has produced in it’s history could probably be counted on  one hand…for those of us that can count that high. The current debt outstanding, fast approaching $17T, is about $50k per man woman and child. So…take a quick look around and ask yourself…who would you be willing to loan $50k to? Yeah…that’s what I thought. kind of scary huh?
So when you purchase that 10 year “risk free” bond paying 2%…just think about who you are counting on to pay it back in ten years….whatever yokel your fellow citizens have decided is the least biggest moron…or perhaps who will give them the most free stuff….that’s the guy, that’s the congress, that’s the Treasury Secretary you are counting on to return your $100 and change when 2023 rolls around. If you are just cashing in the bond you purchased back in 2002, you may noticed that things have changed a bit. That $100 bill only buys 1/3 of the oil it or 1/4 of the metals it did when you bought it. Of course the official inflation numbers were only like 2% a year, but who are you going to believe, Uncle Sam or your lying eyes? If that pattern continues, in ten years that nice crisp $100 treasury secretary Krugman pays you back with is going to be a rather uncomfortable piece of toilet paper.
So when will we stop believing in fairy tales? I’m not holding my breath.