CNS News reporting on the current situation with respect to the "Debt Ceiling", and folks, it looks like we are already there again right now.
As of Oct. 31, according to the Daily Treasury Statement (DTS), the portion of the federal debt subject to the legal limit was $16,222,235,000,000--just $171.765 billion below the $16,394,000,000 debt limit. In October alone, according to the DTS, the debt subject to the limit increased by $195.214 billion.So we are already within the latest one month flow of non-government sector's savings desires of the statutory debt limit. The prevention of the public's fulfillment of these savings desires is not under the control of government fiscal policymakers so all the Treasury can do is juggle withdrawals as best it can without violating the law.
I would think that Treasury has to already be using whatever extraordinary measures are available such as slow payments, delayed reimbursements, delayed funding of retirement obligations and so forth in order to avoid a breach of this capricious self-imposed government limit on the gross value of Treasury securities issuance.
So it looks like fiscal drag may have already started...
10 comments:
Good analysis.
You can rest assured that Republicans are in no hurry to fix this now that Obama has won. This plays right in to their obstructionist plan. To their corrupted minds this could not have come at a better time.
You're right, Malmo. And what makes this worse is that Obama said in his victory speech last night that he "wants to work with Romney." So once again, in victory, he will hand the spoils to the losers. What is with this guy??????
Mike, the first person Obama called after speaking with Romney last evening was the original Democratic social safety net hacker himself, Bill Clinton. Wish it wasn't so but I'm afraid Obama is going to make Clinton look like a choir boy in comparison.
Hopefully some of those newly elected progressive Dems in the Senate can stall his progress on that.
Mint the platinum coin!..... The law allows the Secretary of the Treasury to do the minting without seeking authorization from anybody else!
The Debt Ceiling is gone for ever! Voilà
As Bill Black wrote the other day, we must now focus our energy on the Grand Betrayal…we must hang the yoke of that term on the Grand Bargain™ so people see what is really happening to them.
Clonal, the Fed governors making a generous gift to the American people works too. :o)
http://monetaryrealism.com/ben-bernanke-and-the-trillion-dollar-gift/
Beo,
A truly great idea!
Beo,
One thing Ive been thinking lately is that the Fed uses the revenue stream created by their portfolio to fund their multi-billion $ operations...
They are doing a "maturity transform" to sell shorter dated securities and buying longer dated securities probably in no small part to lock in a positive interest stream to fund their operations for many years into the future...
So to surrender these UST securities would be to forfeit the revenue stream they create for the Fed... they may look at that as a dangerous precedent....
rsp,
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