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Never Has U.S. Borrowed So Much for So Little:Chart of the Day

By Brendan Moynihan - Jan 27, 2011

The U.S. government has been borrowing record amounts of money, though with little effect on

interest rates. That may be about to change, according to Nouriel Roubini, the New York University

economist who predicted the 2008 financial crisis.

The fiscal problem is very serious, Roubini said in a Bloomberg Television interview yesterday

with Tom Keene from theWorld Economic Forum in Davos, Switzerland. The bond vigilantes

have not yet woken up in the U.S. in the way they have in the euro zone. Unless the U.S. addresses

this fiscal problem, were going to see a train wreck.

The CHART OF THE DAY shows total U.S. public debt outstanding soaring to record highs and

approaching its $14.3 trillion ceiling, while interest rates and debt-service costs as a percent of

gross domestic product fall to record lows. The average maturity of U.S. marketable debt

outstanding is five years.

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Treasury SecretaryTimothy F. Geithner said Jan. 6 that lawmakers must raise the federal

borrowing ceiling in the first quarter or risk a default on U.S. debt and a loss of access to credit

markets. Geithner said it will reach that level between March 31 and May 15.

Economist Ed Yardeni coined the term bond vigilantes in 1983 for investors who protest

inflationary monetary or fiscal policies by selling bonds and driving up government borrowingcosts.

To contact the reporters on this story: Brendan Moynihan in Chicago, Illinois, at

bmoynihan@bloomberg.net

To contact the editor responsible for this story: James Greiff atjgreiff@bloomberg.net

2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.

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