Loading ...They’re only talking about the budget deficit there. They aren’t including the unfunded liabilities of $75tn – $100tn over the next 75 years, which is entirely medicare and SS (i.e. not discretional) spending. To cover the costs of these programmes requires improving the current budget by $1.5tn p.a. either by added revenue or reduced spending. That means that in addition to the ~$2tn deficit for this year the government needs to find another $1.5tn just to stand still.
To put this in perspective, your revenues are $5tn, and your expenses are $7tn. You need to increase revenues by 70%, or decrease expenses by 50%, or a combo of the two. None of which are possible. There is no way out. Except:
Print baby, print. And hence the need for the $4tn increase in the debt ceiling.
Why it needs Moody’s to alert the bond market to that I don’t know.