With No Limit in Sight, Federal Debt Creeps Ever-Upward. Seriously, There's No Limit.

Last October, I pointed out that the feds gave themselves an unlimited credit card and public debt outstanding jumped $328 billion, from $16.747 trillion to $17.076 trillion literally overnight. Yowza! That's a shopping spree. The suspension of the debt limit was extended through February 7, 2014.

"On February 8, the limit will be reset to reflect cumulative borrowing through February 7," the Congressional Budget Office helpfully pointed out. "The amount of outstanding debt subject to limit is now around $17.1 trillion."

Well, "now" was November 20 of last year. Outstanding debt is no longer $17.1 trillion. Now, it's closer to $17.6 trillion.

And, if you didn't already know, the debt limit was suspended again—this time through March 15, 2015.

United States Department of the Treasury

Well, OK. That not-quite $17.6 trillion is up just a little from April—and actually down a smidgeon from earlier this month. It's also projected by the CBO to continue to grow with "serious and negative consequences."

Congressional Budget Office

But why obsess about the ten trillion dollar rise in that debt over a decade? It's only money. We can always make more. Right?

Comments

[Rich]

Al Gore, *please* make "An Inconvenient Economic Truth"!

[Rev-Match]

The "hockey stick" graph would have legitimacy in that.

[Brandon]

How's shrike going to try to handwave this one away?

[Corning]

"BOOOOOOOOSH!!!"

[The Last American Hero]

He'll talk about how deficits have declined under the Lightworker, conveniently ignoring the baseline spending problem.

[Aresen]

The money supply is infinite.

Whether it remains actually worth something is another matter.

[AlmightyJB]

Fiscal responsibility is racist

[SQRLSY One]

Fuck, man, yer short here... Fuckin' SANITY is Gawd-danged racist!!!! Reality-ism is racist!!!!

[Paul.]

The longer we go, the less I fear a total Zombie apocalypse-style collapse.

[MegaloMonocle]

The more leverage (debt) you accumulate, the harder the crash when it is called.

[Paul.]

Our only hope is to remain wrapped in the old adage: If you owe someone $100, they own you. But if you owe them $1 million, you own them.

Maybe our debt will be so high and so vast, and we'll owe so many, that it'll never get called.

[Rich]

I'm thinking TPTB are counting on a huge natural disaster to, um, balance the books.

[Aresen]

Possibly.

But there is also the probability that nobody will lend you money any more or extend you credit.

[Paul.]

But what about the vicious cycle? I hear it's vicious, and it's a cycle.

[MegaloMonocle]

If you owe someone $100, they own you. But if you owe them $1 million, you own them.

I know people like to quote this, but its horseshit, especially in the context of sovereign debt.

If this were true, then nobody would ever make payments on large debts. Yet they do. I wonder why.

Mostly, I suspect, because people who carry a lot of debt generally need to borrow more from time to time. Sure, they can fuck their creditors once, but the wheel will turn, and when they go hat in hand for more debt, well . . . .

Are the Fedgov's creditors going to call the debt? No. But they aren't necessarily going to keep buying it. And lo! They haven't been, in anywhere close to the levels we want at the interest we are willing to pay.

So we've been monetizing our debt. The Fed has been sucking up big percentages of new debt issuances for years.

Anybody who isn't a purblind fool knows where monetizing sovereign debt ends.

[CE]

Or in the case of the US government, they need to borrow more all the time, at low rates, to pay off the existing debt. Yet lefties insist that this doesn't mean the FedGov is "bankrupt".

[Corning]

A currency collapse is really not so bad..

It is afterward when the government and central bank try to desperately grip on is when things get nasty.

Hell just look at late 2008 early 2009. The economy is still a pile of shit from the policies, stimulus packages and bailouts that were shoved down our throats.

Iceland's financial collapse whose government did pretty much nothing in contrast recovered pretty well.

[Paul.]

It is afterward when the government and central bank try to desperately grip on is when things get nasty.

Yes, I subscribe to the idea that when the mega state is in its death throes, it becomes most dangerous.

[Marshall Gill]

Hopefully, shooting dogs and beating up the mentally ill are an indication that it is already in it's death throes, but I am probably being way too optimistic.

[Paul.]

If only it were just the dogs and the mentally ill.

[Hawk Spitui]

Given that the history of revolutions isn't very positive, be careful what you wish for. At this point, the chances that you'd wind up with a third-world shit hole are probably a lot better than winding up with libertopia. At least now we're still eating.

[Lady Bertrum]

Yes. Option 1) Argentina. Option 2) Zimbabwe. Option 3) Britain after WWII. You choose.

[MegaloMonocle]

Mi'lady, you left out Option 4) interwar Germany.

[Paul.]

Option 5) That fuel refinery in the Road Warrior.

[The Last American Hero]

As did we in 1921.

[Not a Libertarian]

But let's get real and cut to the chase-

What do Millenials think about the rise of public debt?

[Sudden]

~65% oppose, around 35% support.

However, if you tinker the wording of the question to read: "Is it ok to owe many hundreds of trillions of dollar per peron if that guarantees everyone a free college edumakashun in (insert preferred culture) Studies, then the margin flips to ~60% support and ~40% oppose

[Corning]

Well, "now" was November 20 of last year. Outstanding debt is no longer $17.1 trillion. Now, it's closer to $17.6 trillion.

So GDP is about 16 trillion.

as quoted above debt is 17.1 to 17.6 trillion...

Yet the second graph shows debt to GDP ratio being only around 78%.

WTF?!?!

This is not the first time reason has posted graphs showing such a low percent of debt to GDP.

Why the fuck do you guys keep doing it?

[robc]

Publicly held debt is the graph.

The other is total debt.

Why they cant stick to a consistent number is beyond me.

[CE]

And big government apologists insist we're not that bad off, because the debt to GDP ratio is barely over 1.0. As if government spending should really be included in GDP. And as if every dollar everyone earns really belongs to the government. Government debt to government "income" (annual theft via taxes) is really closer to 6.0.

[Hugh Akston]

Dear CONGRESS,

Because of your excellent credit rating and history of financial responsibility, we are pleased to inform you that you are pre-approved for the new American Express Platinum Card. This card features a no credit limit and a low 3.4% APR payable by your children or grandchildren.

[Pl?ya Manhattan.]

I think of congress as more of a Discover Card type operation.

[Sudden]

Obligatory

[Pl?ya Manhattan.]

"They're an exclusive club called anybody!!!"

[Paul.]

But I still have checks!

[Not a Libertarian]

Why does The Economist of all places or at least their economics editors feel that it a tragedy that the US is not taking on more debt in order to close the "output gap"

[Paul.]

Because it's The Economist.

[MasterDarque]

Shop til you drop and enjoy the decline.Why worry about the debt when nobody else seems to care.

[Pl?ya Manhattan.]

I wish Vanguard sold gold funds.

[Lady Bertrum]

One word, dude. Physical.

[MegaloMonocle]

Yah. My coins are tucked in nice and safe with the ammo and the guns.

[Hugh Akston]

That's gotta be uncomfortable to sleep on.

[Pl?ya Manhattan.]

Where do you keep yours? The mattress?

[Sudden]

I feed them to my dog, dig them out of his crap when he shits, and then feed it to him again.

This is why you're not allowed to steal him.

[Lady Bertrum]

I really just buy them for my sons periodically. I store them in a safe but accessible location. They amount to less than 5% of total net worth, but I find it comforting having them. Just a little sump'tin, sump'tin to hand over to the kiddies if and when the time is right.

[Lady Bertrum]

And if the time is never right, I'll give them to grandkids (if I ever get them) for birthdays and graduations. Gold never becomes valueless, not in the last 3 thousand years, anyways.

[Pl?ya Manhattan.]

If I buy a few kilo bars, I'm going to need to reassess my security situation. I'm looking at a few gold trusts that trade as securities, but it doesn't quite feel like the same thing.

None of this will be for the kids. They have fully funded 529s, and that's all they get unless I die early.

[Lady Bertrum]

Well, I'm not buying kilos; I'm buying coins - gold eagle coins which are 1 oz. Easy to store, easy to keep track of, not much security needed.

You might think you're only leaving your kiddies with 529's but as you age (I'm 42 my husband is 52) you might find your assets need to go somewhere.

[Pl?ya Manhattan.]

I'm 34. I plan on dying on a tropical island with a smile on my face. The kids can have the house, I guess. Although I might have to reverse mortgage it; retiring to the 4 Seasons Bora Bora ain't cheap.

[Lady Bertrum]

I hear you. Dying on the day you spend your last dollar is an admirable ambition.

[Notorious G.K.C.]

I feel obliged to share this Salon piece from February, and since it's Troll Appreciation Thursday, I will:

"I lost my dad to Fox News: How a generation was captured by thrashing hysteria...

"EDWIN LYNGAR...

"My dad is 67 years old, a full year younger than the average Fox viewer, who is 68, according to an analysis in New York magazine by columnist Frank Rich. I've read accounts of people my age ? 40 or so ? losing parents to cancer or Alzheimer's, but just as big a tragedy are the crops of grandmothers and grandfathers debilitated by Fox News-induced hysteria....

"When I finally pulled the handle for Obama in 2012, my father could not believe how far I'd fallen. I have avoided talking politics with him as much as possible ever since. Last week, I invited him to my house for dinner with the express purpose of talking about politics and most especially his Fox News addiction. Since he retired, he only watches Fox. As we started chatting up politics, I repeated one mantra over and over: "Please, please, consume another source of information." I repeated my plea a dozen times. He defended with stridency his choices....

"...To some people the idea of retirees yelling at the television all day may seem funny, but this isn't a joke. We're losing the nation's grandparents, and it's an American tragedy."

http://www.salon.com/2014/02/2....._hysteria/

[Lady Bertrum]

I mentioned this in another thread but it bares repeating: I fucking hate Baby Boomers. More annoying than the old fogies watching O'Reilly and Hannity are their shitty children complaining about their parents viewing Fox.

And, now I pause to watch Rand Paul being interviewed on Greta. 😉

[Dances-with-Trolls]

C',mon, Eddie, you're better than that. That's not trolling, that's just linking to an idiot, which is the number 1 post PM links past-time at HnR.

I was expecting something like "Second Look at Communism Since the Pope Seems Cool With It?" or something like it.

[Notorious G.K.C.]

Ooh, the P.M. links thread is still active, I think I'll go and inflict this article on them.

Follow along at:

http://reason.com/blog/2014/07.....nt_4627619

[Suthenboy]

Salon has become a commie rag. What else do you expect?

[Doctor Whom]

Has become?

[MegaloMonocle]

The debt's up almost $800BB so far this fiscal year, with nearly 3 more months to go.

Remember when the CBO projected a deficit this year of less than $500BB? Yeah, neither do they. Even though they said it in April. Of this year.

When, according to Debt to the Penny, the deficit was already nearly $800BB. And there is no possibility whatsoever that the deficit is going down by $300BB over the next few months.

Maybe the CBO was talking about debt held by the public? That's up almost $600BB this fiscal year. And not going down by the end of the year, either.

[CE]

At least the millennials are more libertarian leaning. They'll pay it off.

[Suthenboy]

I saw Obumbles speak today. Not sure where or why or what he was bloviating about but some lefties in the audience began heckling him. He already seemed annoyed but when they started he got very irritated. "Sit down guys! I am almost finished here!". I really think the guy can't wait to be out of office. What worries me is what the petulant little shit will do to spite us before he is.

[Libertarian]

Serious poll question: will the $18T EVER be paid off? I think it's more likely to be repudiated.