Treasury Department out today, with a statement that the total US debt will soon be within $100B of the current ceiling and this will trigger a request by the Obama Administration for an automatic increase in the current ceiling by $1.2T. Story at CNBC.
Who cares?
Well Congress apparently also doesn't care as they are on break until January 17th and only have 15 days to deny the Obama Administration request and then it is automatically approved.
What happened to all of the political posturing around this issue that we were treated to this past summer? Where is it this time? This whole concept of a "debt ceiling" is an unnecessarily self-imposed constraint on the absolute fiscal authority of the US Government.
The previous debate and delay surrounding this legislation over the summer was a complete waste of time and energy and led to damaging fiscal drag that hurt the nations economic output this year, at least we will avoid that media circus this week as we head into the new year.
So the Republicans won't even do their sham vote to oppose it? All that for nothing?
ReplyDeleteFriday is the 30th. So 15 calendar days later means the debt ceiling goes up by $1.2 trillion on Jan 13 or 14, right?
Mike looks like so,
ReplyDeleteThis from Beo in the old thread:
"After that, once Tsy burns through all but $100B, the President issues another notification letter. This one has a 15 day shot clock, after which the hopefully final $1.2T of the deal comes through. "
http://mikenormaneconomics.blogspot.com/2011/09/new-debt-ceiling-debacle-unfolding.html
so it looks like Treasury will send the 100B notice this week (latest DTS shows still a bit below the 100B threshold with SS payments going out soon) and then the 1.2T should be available in 15 days.
Looks like we are adding a bit over 100B of "debt" per month so this should be enough to cover operations for only 15 days (half a month)...
So this time it looks like probably no disruption to Treasury functions but if they net issue a lot this week they can get pretty close to the current ceiling if they blow strongly thru that 100B threshold, so I'll keep an eye on it over the next few weeks...
Looks like they did 30B of 4-week bills today, (at 0.000% which is now getting commonplace).
http://www.treasurydirect.gov/instit/annceresult/press/preanre/2011/R_20111228_1.pdf
Resp,
no media hubub??? bummer I would have loved to go long bonds again. LOL
ReplyDelete