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doahh

US debt ceiling - government now has less cash than Apple or Google

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It seems that this time the US debt ceiling suspension order was not renewed:

Quote

On Wednesday, the temporary suspension of the debt ceiling ended, and so now the federal government is not going to be able to go into any more debt until the debt ceiling is raised.

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Already, the U.S. Treasury has less cash on hand than Apple or Google, and that cash balance is going to keep on dropping until the debt ceiling is finally lifted.

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But now the U.S. national debt will not be allowed to rise by another penny until the debt ceiling is raised or suspended once again.

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As things get tighter and tighter, the Trump administration will become increasingly desperate to get the debt ceiling raised.  As I wrote about yesterday, the key for Trump is going to be finding 218 votes in the House of Representatives that will be willing to go along with him.

You would think that since Republicans control the House that this should be easy, but the truth is that there are a lot of conservative Republicans that are not inclined to agree to a debt ceiling increase without substantial accompanying budget cuts.

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During the Obama years the U.S. national debt increased by an average of well over a trillion dollars a year

 

Since 2011 the US has simply been increasing the limit under a clause in the Budget Control Act. That clause has been allowed to lapse and now Trump will need to find a way to get the 218 additional votes he needs to increase borrowing from fiscal conservatives. He seems to be between a rock-and-a-hard-place with the electorate to whom he made promises not to cut Social Security and Medicare, and the House of Representatives who seem to want budget cuts. A deal will almost certainly be made before the 8-12 months of cash that the US has is spent, but it could cost Trump dearly in reputation and the markets may react negativly.

Anyone with an opinion on the importance of this?

Edited by doahh

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It had a biggish jump in March 2015 and the debt ceiling was then suspended until now.  It's level had been relatively flat since 2012 - there were massive jumps in 2010 and 2012 .  Mind you it just went haywire soon after the millennium under both Bush and Obama up to 2012 and especially after the start of the economic collapse.

https://en.wikipedia.org/wiki/History_of_United_States_debt_ceiling

Apparently Trump has predicted a recession is imminent so maybe it's just a matter of who is to blame now.  Haven't the HoR responded well to scaremongering on the economy - it worked a treat just after the start of the crash so if it's that tight it'll likely work again - and there's all their own pocket lining to consider as well.

It seems to be an important thing at the very least to keep the manipulated statistics rosy and that's why the increases are often so massive - likely just to make sure they have enough for a few years to come.

goldcore_bloomberg_chart4_17-09-14.png

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800px-US_Public_Debt_Ceiling_1981-2010.png

 

 

Trump said he was going to drain the swamp so I guess some action or inaction related to the debt limit might serve as a useful mechanism to do just that.

Edited by billybong

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If one looks at the long term chart going back to 1981 and it's pretty reliable average progression year on year almost until the start of the economic collapse you might think that using that rate of increase and extrapolating it then the US could get along with say $10 trillion of debt in 2017 which would still be almost a doubling since year 2000 (especially with the base rates so low) .  They were reported to have a very good living standards before year 2000 - but no in 2017 they apparently need almost double the extrapolated amount - more than $18 trillion now.  

That's just the way they run things.

Edited by billybong

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