Zee4Money

Shorting the Long Bond: The Obama Solution Meets China

You're concerns are right on target. However, one significant source of potential reduced spend must come from DoD. We are currently spending in excess of $750B a year on defense. In 2000 the DoD budget was $250B. A change in priorities for defense could be a big source of money. However, the earliest any significant changes will occure to spending will be FY10-FY12. Watch the future years budget to see if there is any hope for a return to fiscal responsibility, otherwise you are correct and long term rates are headed much higher. We simply can't grow fast enough to generate the revenue.