On the one hand, there is very little indication that the people lending money to the United States are freaking out about our finances. On the other hand, the future is impossible to predict. Greece's 10-year yield nearly tripled in six months. But back to that first hand, we're not Greece. OK, enough hands. Here's the IMF's take:
In the case of the U.S., the fund said the odds were roughly three out of four that the country could increase its total debt to some degree without being penalized by investors -- logical considering that the debt is steadily increasing and interest rates remain low and steady.
However that probability falls to an even 50-50 if the amount of new borrowing were to exceed fifty percent of GDP - or about $7 trillion given the current, $14 trillion size of the U.S. economy.
That might seem like plenty, except for the fact that under current Office of Management and Budget projections the "fiscal space" may fast disappear. The OMB projects total U.S. debt to jump by about $4.7 trillion in the next five years, leaving little room after that.
Read the full story at WaPo.
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