.U.S. to hit debt limit before election day
The United States Department of Treasury will reach the the statutory limit it is allowed to borrow money before election day, according to a new study by Sen. Rob Portman, R-Ohio., former director of the U.S. Office of Management and Budget.
“Following the contentious debt ceiling last August, President Obama promised that he would take action to address the country’s fiscal crisis. He has failed to do that," Portman said. "In fact, his new budget increases spending and projects that Washington will be hitting the debt ceiling again in mid-October – burning through a $2.1 trillion debt limit increase in just over 14 months."
Portman's office notes that according to Obama's budget, total debt subject to the statutory debt will reach limit will reach $16.334 trillion by September 30, 2012. This is just $60 billion below the 16,394,000,000,000 debt limit. Since the federal government is adding to the national debt at a rate of $132 billion a month, the debt ceiling is on schedule to be reached by October 15, 2012.
" This is an unfortunate but clear signal to the American people that Washington is spending too much, borrowing too much, and putting our nation’s fiscal stability at risk," Portman said.
Earlier today, Treasury Secretary Tim Geithner admitted that the debt limit would be reached this year. But he sounded confident it would be later than October 15th. "We do not expect to hit the debt limit until quite late in the year, significantly after the end of the fiscal year [Sept. 30] but before the end of the calendar year," Geithner told the Senate Budget Committee.
WX
“Following the contentious debt ceiling last August, President Obama promised that he would take action to address the country’s fiscal crisis. He has failed to do that," Portman said. "In fact, his new budget increases spending and projects that Washington will be hitting the debt ceiling again in mid-October – burning through a $2.1 trillion debt limit increase in just over 14 months."
Portman's office notes that according to Obama's budget, total debt subject to the statutory debt will reach limit will reach $16.334 trillion by September 30, 2012. This is just $60 billion below the 16,394,000,000,000 debt limit. Since the federal government is adding to the national debt at a rate of $132 billion a month, the debt ceiling is on schedule to be reached by October 15, 2012.
" This is an unfortunate but clear signal to the American people that Washington is spending too much, borrowing too much, and putting our nation’s fiscal stability at risk," Portman said.
Earlier today, Treasury Secretary Tim Geithner admitted that the debt limit would be reached this year. But he sounded confident it would be later than October 15th. "We do not expect to hit the debt limit until quite late in the year, significantly after the end of the fiscal year [Sept. 30] but before the end of the calendar year," Geithner told the Senate Budget Committee.
WX
posted by madtom at 11:24 PM
5 Comments:
Debt limit? DEBT LIMIT? We don' need no stinkin' debt limit!
Haven't you heard? The budget deficit isn't the problem. The DEBT is the problem, but borrowing trillions is the path to bringing down the debt.
That and the reality of how Global Warming is causing the coming Ice Age is just one more reason we need less democracy and more governmental control in our lives. It's too complicated for us mere mortals. Common sense has no place in this brave new century.
Your just too stupid to understand how to monetize the debt, and probably a racist to boot
"Effects on inflation
When government deficits are financed through this method of debt monetization the outcome is an increase in the monetary base, the money supply. If a budget deficit persists for a substantial period of time, the monetary base will also increase, shifting the aggregate-demand curve to the right leading to a rise in the price level.[3] When governments intentionally do this, they devalue existing stockpiles of fixed income cash flows of anyone who is holding assets based in that currency. This does not reduce the value of floating or hard assets, and has an uncertain (and potentially beneficial) impact on some equities. It benefits debtors at the expense of creditors and will result in an increase in the nominal price of real estate. This wealth transfer is clearly not a Pareto improvement but can act as a stimulus to economic growth and employment in an economy overburdened by private debt[citation needed]. It is in essence a "tax" and a simultaneous redistribution to debtors as the overall value of creditors' fixed income assets drop "
Wikipedia
Oh, I see. The rising percentage of the government budget towards annual expenditures won't rise as the books require plus the same rate as inflation that will result from a rising money supply applied to further raise the debt. Here all this time I thought law dictated that entitlement disbursements were tied to inflation...and please don't tell those purchasing our debt that high inflation is certain to come, in fact is the policy, because they might refuse to buy the debt at low rates which will defeat the strategy. You know the Chinese are pretty clueless about such things. If that happens, we are truly and thoroughly screwed. And so are they, which is why they have played along so far.
I know I am unsophisticated, uneducated and uninformed about the complexities of world finance, but I still know when smoke is being blown up my ass.
Well I think the Chinese done figured it out about a year ago, not only did they stop buying, but I just read they are selling treasuries. As far as I know, it's all going to the Fed and their partner banks.
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