U.S. borrowing is already over the limit... except technically not quite

Little-Acorn

Well-Known Member
Joined
Jan 23, 2009
Messages
2,444
Location
San Diego, CA
A very small part of the National Debt is "not subject to the limit", which barely puts it back under the Debt Ceiling... for a few days.

But when the Obamanites do start borrowing over the limit, it should hardly be news. A judge found all of Obamacare unconstitutional, in an opinion that ordered them to stop implementing it... but they simply disobeyed the law and kept right on going with it. And Congress has passed a number of Continuing Resolutions that ordered them to not spend more than they did in previous periods... yet they have simply increased spending by huge amounts anyway.

Why should the Obamanites disobeying the law on the Debt ceiling, be any different?

----------------------------------

http://www.zerohedge.com/article/total-us-debt-now-officially-above-ceiling

A quick look at today’s just released total debt to the penny from the Treasury may crimp the artificial smile of even such die hard administration sycophants as Moodys. Why: because the total debt, as we predicted when we observed last week’s 30 Year auction, is now at $14,305,336,580,992.11. This is a problem because as anyone who rails against the broken US fiscal apparatus should be able to tell you, the debt ceiling is $14.294 trillion. In other words we have now officially breached the debt ceiling by $11 billion. So why has the US not filed a notice of default yet? Because the actual debt that matters for legal purposes is the debt “subject to the limit”, which is $52 billion less than the total debt primarily due to $10 billion held at the Federal Financing Bank, and $41 billion in unamortized discount: a number which fluctuates in time depending on how much over or under par bonds are issued, but which ultimately will be zero at maturity of all debt (haha). In other words, as of today, the US Treasury has dry powder for just another $41 billion in issuance, or just over your average 5 Year auction. This can be seen best on the following chart from the Treasury where the total debt line has just passed the limit.

So what does this mean for near term issuance? Also per the Treasury, there is a total of $55 billion in debt paydown in the next week primarily in bill redemptions, offset by $14 billion in issuance in the last week of April. The problem is that this week also happens to be a major tax refund week. We anticipate that tax refunds will likely total between $20 -25 billion net over tax revenues. Which means there will be a net cash need of about $75 billion. As we ended Thursday at about $30 billion, Friday’s cash balance (released at 4pm by the FMS) could be very critical to determine if the Treasury will be forced to come up with some emergency form of 11th hour cash raise. It also means that the debt ceiling clock is ticking ever louder. The Treasury will have capacity for one more full weekly auction, to be completed in the first week of May, and then it is game over.

Update: cash as of Friday was $58 billion. With $55 billion in cash out this week and who knows how much of refund funding, it could get mightly close…
 
Werbung:
For an adminsitration where a cut is called spending and an expense is called a tax reduction anything is possible.
 
For an adminsitration where a cut is called spending and an expense is called a tax reduction anything is possible.

from a party that says they are fiscally responsible..buy spending more and cutting taxes at the same time...

a party that claims to want to get rid of the debt, but rules out any and all increases in revenue...even when they are at historic lows.
 
from a party that says they are fiscally responsible..buy spending more and cutting taxes at the same time...

a party that claims to want to get rid of the debt, but rules out any and all increases in revenue...even when they are at historic lows.

It would seem that 100% of the politicians have their heads up their...

Which is why it is you and I against them. We cannot continue to give them the power to run the car into a ditch. We must cut taxation because it is the ONLY way that spending will be cut. Then after spending is cut and a new batch of politicians is in office we can permit them to tax us.

I agree that spending needs to be cut. I also agree that revenue needs to increase. Raising taxis is not necessarily the answer. Letting the economy impove would have a greater impact on revenue. But I am not opposed to tax increases if done by politicians who prove themselves to be able to handle money.
 
It would seem that 100% of the politicians have their heads up their...

Which is why it is you and I against them. We cannot continue to give them the power to run the car into a ditch. We must cut taxation because it is the ONLY way that spending will be cut. Then after spending is cut and a new batch of politicians is in office we can permit them to tax us.

I agree that spending needs to be cut. I also agree that revenue needs to increase. Raising taxis is not necessarily the answer. Letting the economy impove would have a greater impact on revenue. But I am not opposed to tax increases if done by politicians who prove themselves to be able to handle money.

Tax increases do not raise revenue. Tax increases lower the incentive to earn more money, reduce the spending power of the taxpayers, reduce the ability of taxpayers to save and invest their money, and reduce the ability of small businesses to operate at their current pace, while also destroying their ability to expand and add jobs.

Lowering taxes increases revenue. This has been proven over and over and over again.

When the top 50% of wage earners already pay over 96% of the income taxes in this country, how much more of the burdens of society can these hard-working people be expected to bear?
 
Tax increases do not raise revenue. Tax increases lower the incentive to earn more money, reduce the spending power of the taxpayers, reduce the ability of taxpayers to save and invest their money, and reduce the ability of small businesses to operate at their current pace, while also destroying their ability to expand and add jobs.

Lowering taxes increases revenue. This has been proven over and over and over again.

When the top 50% of wage earners already pay over 96% of the income taxes in this country, how much more of the burdens of society can these hard-working people be expected to bear?

keep repeating and one day maybe it will be even true...the rich are taxed at there lowest rate in years...Clinton Raised the taxes..so did Bush H W and Reagan...the earth did not stop...raising taxes to what they paid in the 90's when many of them got rich in the first place...not going to crush us...but gutting the whole social safty net, ending medicare and cutting government to the bone is not going to help anyone long run. Also we can keep cutting all we want, unless we change the tax system...the debt will not go away.
 
keep repeating and one day maybe it will be even true...
You've completely avoided my Higher Taxes = Greater Revenue thread yet here you are repeating the lie that Higher Taxes = Greater Revenue. If you have some proof of your claim that Higher Taxes = Greater Revenue then please, go to my thread and share it with everyone.

the rich are taxed at there lowest rate in years...Clinton Raised the taxes..so did Bush H W and Reagan...the earth did not stop...raising taxes to what they paid in the 90's when many of them got rich in the first place...not going to crush us...
So you believe raising taxes on the "rich" from 35% to 39.6% will balance the budget? Lets look at some numbers...

http://www.bea.gov/national/index.htm#gdp

2010 GDP: $14,660,400,000 ($14.6 trillion)

2010 Spending: $3.552 Trillion (24.2% of GDP)

2010 Revenue: $2.381 Trillion (16.2% of GDP)

Revenue as a % of GDP hit an historic high at 20.9% and that happened when tax rates were "at their lowest rate in years". You believe raising tax rates to 39.6% will cause revenue to be 24.2% of GDP? Based on what?

From 1968-1981 the top marginal rate was 70%, that's double the current rates, and revenue as a % of GDP never broke 20% of GDP. Raising tax rates does not cause an increase in revenue as a % of GDP and it will not eliminate our deficit.

but gutting the whole social safty net, ending medicare and cutting government to the bone is not going to help anyone long run. Also we can keep cutting all we want, unless we change the tax system...the debt will not go away.
We have a spending problem, not a revenue problem, and your "social safty net" is eating up the lions share of the revenue we bring in. Your plan to tax and spend doesn't make the debt or deficit go away. The only way to get control of the deficit, and eventually the debt, is to cut spending to the point where spending is less than revenue.
 
the answer is tarrifs, it doesnt matter how much you tax, if wages / production costs overseas are significantly lower than here with no import duty jobs and money will go overseas and create a deficit either govt deficit or public deficit, it hardly matters a deficit is a deficit, to bring the economy back in balance tarrifs must be enforced, jobs brought back to the us, the deficit may be best eliminated through money printing and inflation, it may be impossible to lower some wages and the most devastating financial instrument is really inflation adjusted wage / benefits as are character of some unions and public workers, (this will literally devour every last dollar until default) the govt appears to already be aware of the problem as evidenced by their suspension of automatic increases for social security, and the govt massaging inflation figures to be lower than the real rate of inflation. this is also part of the reason why food and energy prices are appreciating much faster than other items that are officially included in the inflation data. Because rises in food and energy prices do not affect inflation adjusted income and programs they rise much more readily and easily without triggering a reaction. Inflation adjustments which ensure that wages will perpetually remain out of balance preventing inflation from performing its naturally intended role of wage / production balance, leading to an economy which cannot naturally regulate itself and places its survival at the whim of policy makers who have vested interests in accelerating the imbalance.

in summary inflation adjusted wage protection must be eliminated, the deficit must be reduced through inflation, tarrifs must be placed on imports, that is the only way to get jobs back to America and solve the deficit problem, the only other solution is default, or elimination of most entitlements, the later two options not necessarily protecting jobs or livelihoods but setting the stage for a massive deflation spiral. Inflation provides the best way to exit the crisis in sound order and creating jobs. Defaulting on the debt could work if the defaults are balanced by a massive us printing program designed and closely regulated at producing maximum value for every dollar spent for the people and the economic recovery, (the advantage of default lies in keeping wealth at home essentially stealing form foreign creditors, an act which is health for an economy that is over-saturated in investment and ownership control which is itself when excessive a deficit to the common citizenry and a smother-er of innovation) something that is impossible in todays political climate, especially as bondholders hold too much political power to allow a default. Defaults like inflation are natures way of regulating an economy both of which are currently being held hostage by policy makers with the intent of protecting those interests who have much to loose with the end game goal of enslaving the citizenry to debt slaves.
 
Inflation provides the best way to exit the crisis in sound order and creating jobs.
Yes, that worked out so well in the Weimar Republic and more recently in Zimbabwe. :rolleyes:

“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.

The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat.

As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.”

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” - J.M. Keynes
Not even the most famous Leftist economic theoretician thinks inflation is a viable solution.

Inflation is the most regressive form of taxation that a government can impose upon it's people. The poor suffer the most as what little they have becomes even less as the value of currency is devalued. It also destroys the middle class for being fiscally sound enough to have some kind of savings, whether it's a savings account in the bank, a 401k, an IRA, or some other form of investment, devaluation of the currency causes their savings to evaporate into thin air. This leaves only the upper classes who, by way of asset diversification and property ownership, can actually go through an inflationary period and come out ahead, or at the very least minimize thier loss.

Inflation is a hideous "cure" far worse than the problem it's meant to solve.
 
Werbung:
keep repeating and one day maybe it will be even true...the rich are taxed at there lowest rate in years...Clinton Raised the taxes..so did Bush H W and Reagan...the earth did not stop...raising taxes to what they paid in the 90's when many of them got rich in the first place...not going to crush us...but gutting the whole social safty net, ending medicare and cutting government to the bone is not going to help anyone long run. Also we can keep cutting all we want, unless we change the tax system...the debt will not go away.

I think he should repeat it. It just might be true. A safety het catches those who have tried and slipped. The programs we have go far beyond being merely a safety net. Many of these programs give money to people who are not in need, disincentivize people, and enable others. These programs need to be smaller.

I agree we need to change the tax system. As long as we argue over whether it should be progressive or regressive it will never be a good system for the simple reason that neither progressive nor regressive systems are good. We need a system that taxes justly, with relevance, and to the least degree that it must.

And the debt could go away by merely cutting. I suspect it will take some tax increases* but it could go away by merely cutting. What will not happen is the debt will never go away with a combination of no cuts and increases.

*talking about increases ruins the stew before it is even made. We need to talk about increasing revenue first and only then see if the way to do that is to increase taxes.

But if we had never incurred this much debt to begin with we would not even need to be talking about these desperate needs. Who else thinks it just might be that politicians allowed a desperate situation to develop because that is the only way their solutions would even be considered by regular Americans?
 
Back
Top