Tag Archive: United States public debt


Congress And The Ever-Rising Debt Limit

 

 

 

” Congress has the constitutional prerogative to control spending, and it does so through the debt ceiling, which sets the allowable limit of federal government borrowing. The first chart shows all the times that the debt limit has been raised since 1980, which includes 18 times under Ronald Reagan, four times under Bill Clinton, and seven times under George W. Bush. Most recently, President Obama raised the debt limit for his fifth time, to $16.69 trillion, $305 billion above the previous statutory limit, which is exponentially greater than when it first reached $1 trillion about 30 years ago in 1982.

The debt limit applies to federal debt held by the public and by the government’s own accounts, also known as intergovernmental debt, which includes Social Security, Medicare, and Civil Service Retirement accounts. Of the $16.699 trillion in outstanding debt subject to limit, roughly $11.9 trillion is held by the public, and about $4.8 trillion is held by government accounts.

Simply raising the debt ceiling alone does nothing to address underlying drivers of our debt problem. The persistence of federal budget deficits has led to sustained growth in debt, thus requiring the government to issue increasing amounts of debt to the public. The second chart shows the growing portion of federal debt held by the public. Here are some key observations: “

 

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$3.39T Quantitative Explosion: Fed Owns More Treasuries and MBSs Than Publicly Held Debt Amassed From Washington Through Clinton

 

 

” The same day that the Federal Reserve’s Federal Open Market Committee announced last week that the Fed would continue to buy $40 billion in mortgage-backed securities (MBSs) and $45 billion in U.S. Treasury securities per month, the Fed also released its latest weekly accounting sheet indicating that it had already accumulated more Treasuries and MBSs than the total value of the publicly held U.S. government debt amassed by all U.S. presidents from George Washington though Bill Clinton. 

Since the beginning of September 2008, in fact, the Fed’s ownership of Treasury securities and MBSs has increased seven fold.

As of the close of business Thursday, the Fed said, it owned approximately $2,052,055,000,000 in U.S. Treasury securities and approximately $1,339,771,000,000 in mortgage-backed securities—for a combined total of about $3,391,826,000,000 in Treasury securities and MBSs.

The U.S. Treasury divides the U.S. government debt into two parts: debt held by the public, which includes publicly traded Treasury securities such as Treasury bills, notes and bonds, and intra-governmental debt, which is money the Treasury has borrowed out of the Social Security trust fund and other government trust funds and then used to pay current expenses.

As of the opening of business back on Nov. 23, 2001, according to the Daily Treasury Statement, the federal government’s total debt held by the public was $3,383,605,000,000.”

 

 

 

 

 

 

 

 

 

 

 

Senate Democrats Adopt First Budget in Four Years

 

 

 

” Lawmakers on Saturday voted 50-49 to endorse a fiscal 2014 measure that proposes to raise $1 trillion by clamping down on tax breaks for the wealthy while paring spending on defense, farm subsidies and other programs.

“Budgets are about far more than numbers on a page — they are about the values and priorities of the American people,” said Senate Budget Committee Chairman Patty Murray, a Washington Democrat and the plan’s chief sponsor.

The proposal highlighted differences between the two parties over taxes, spending and the size of government. The vote clears the way for the next phase in Washington’s budget battle, which probably will revolve around the need to raise the U.S. debt limit. Federal borrowing authority is scheduled to expire May 19.

Republicans said the Senate Democrats’ proposal would do too little to rein in government red ink.

“Honest people can disagree on policy, but there really cannot be disagreement on the need to change our nation’s budget course,” said Alabama Senator Jeff Sessions, the top Republican on the chamber’s Budget Committee.

Four Democrats voted against the final version: Max Baucus of Montana, Mark Begich of Alaska, Kay Hagan of North Carolina and Mark Pryor of Arkansas. All are up for re-election in 2014.”

 

 

 

 

CBO Director on How Absolutely Gigantic The Deficit Will Be Over the Next Decade

 

CBO 7Trillion Deficit

 

 

 

” What’s that Liberals? You don’t want to let some Republican politician tell you how bad the budget looks? Okay, then let the non-partisan Congressional Budget Office Director tell you.”

 

Seven TRILLION dollars in additional debt over the next decade !

The Debt Ceiling: Assets Available to Prevent Default

 

 

 

 

 

” The debt ceiling, or the legal limit the federal government may borrow, is set currently at $16.4 trillion.[1] In his latest report, Secretary of the Treasury Timothy Geithner predicts that the United States will need to increase the debt ceiling sometime between February 15, 2013, and early March 2013.[2] The Congressional Research Service estimates the federal government will have to issue an additional $700 billion in debt above the current statutory limit to finance obligations for the remainder of FY2013.[3]

WHERE WE ARE

Congress is currently considering whether it should raise the debt ceiling. This is not new territory. Congress has raised, extended, or revised the definition of the debt ceiling 78 separate times since 1960,[4] including 11 times in the past 11 years.[5] However, raising the debt ceiling for the 12th time in as many years without recognizing and correcting systemic problems would have consequences beyond merely tapping revenue and assets to meet FY2013 budget commitments. Continuing to pass debt ceiling increases without proper spending reforms would be irresponsible.[6]

 

 

 

 

Fitch May Downgrade U.S. Credit Rating

 

 

 

” The United States could lose its top credit rating for the second time from a leading credit agency if there’s a delay in raising the country’s debt ceiling, Fitch Ratings warned Tuesday.

Congress has to increase the country’s debt limit, which effectively rules how much debt the U.S. can have, by March 1 or face a potential default. There are fears that the debate will deteriorate into the squabbling and political brinkmanship that marked the last effort to raise the ceiling in the summer of 2011. The U.S. Treasury Department warned then that it had nearly reached a point where it would be unable “to meet our commitments securely.”

If Fitch does move to downgrade the US, it will join Standard & Poor’s, which was so concerned by the dysfunctional 2011 debate that it stripped the U.S. of its triple A rating for the first time in the country’s history. Another major ratings agency, Moody’s, also has a negative view on the U.S. outlook.”

 

 

But we don’t have a spending problem

10 Facts On The Fiscal Cliff, Debt, And Spending

 

 

 

 

” Budget policy in 2012 was characterized by deficit spending, major increases in the national debt, and a heated debate over the “fiscal cliff.”

With just days left for President Obama and lawmakers in Congress to avert a major tax hike, sequestration, and other major policy changes, today we bring you a list of the top 10 facts on federal spending in 2012:

  1. Four years of trillion-dollar-plus deficits. Fiscal year 2012 concluded with a $1.1 trillion deficit, marking the fourth year of trillion-dollar-plus deficits. Too much spending is the root cause of the federal government’s deep and sustained deficits. At 23 percent of gross domestic product (GDP) in 2012 and on track to rise further, federal spending is growing at a dangerous pace.
  2. National debt hit $16 trillion. On September 4, the U.S. national debt hit the $16 trillion mark. We owe more on the national debt than the entire U.S. economy produced in goods and services in all of 2012. Sixteen trillion dollar bills stacked one on top of the other would measure more than 1 million miles high, which would reach to the moon and back more than twice.
  3. The debt limit was raised by $1.2 trillion. On January 30, the federal government raised its debt limit from a staggering $15.194 trillion to an even bigger $16.394 trillion. This increase was the last one of three granted in the Budget Control Act of 2011, a result of that summer’s debt ceiling negotiations, which allowed for a total debt limit increase of $2.1 trillion. “

 

 

Obama’s Ridiculous Fiscal Cliff ‘Offer’ Is An Epic Non-Starter

 

 

 ” Barack Obama desperately wants to take the country over the fiscal cliff.  That’s the only conclusion one could possibly draw from the absolute dementia masquerading as his administration’s opening offer.  Here’s the basic rundown of what the president would like to see happen.

  • $1.6 trillion in tax increases – not just on the wealthy, but on businesses the administration views unfavorably, such as oil.
  • $50 Billion in new stimulus spending
  • A deferment – of a single year – on the military sequester
  • An extension of unemployment benefits for those out of work
  • Federal money to shore up underwater mortgages

To top off the lunacy, President Obama would like nearly unlimited power to raise the debt ceiling whenever he likes, as high as he likes. This is something Timothy Geithner hinted at a few weeks ago.  If Obama has his way, the only constraint on this power would come when a difficult-to- achieve Congressional supermajority chooses to override his decision. “

 

 

 

Illustration By Lisa Benson

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