U.S. To Reach $16.4 Trillion Debt Ceiling By End Of Year

The federal government keeps spending… and the nation’s financial health keeps on deteriorating. Rachelle Younglai wrote on the Reuters website last night:

The Obama administration said on Wednesday that the nation would hit the legal limit on its debt near the year’s end, although it can tap emergency measures to stave off a default and keep the government running into early 2013.

As of Monday, the U.S. Treasury was $235 billion below the $16.4 trillion statutory ceiling on the amount it can borrow. That gives the government enough funds to pay its bills, including interest on its debt and retirement health benefits, until the end of the year, the Treasury said, reiterating a forecast it made in August.

So, the U.S. national debt is on track to reach $16.4 trillion by the end of 2012.

As I pointed out back on September 4 when the Treasury Department revealed the debt had surpassed $16 trillion:

When President George W. Bush took office, the national debt stood at $5.768 trillion.

By the time President Barack Obama occupied the White House, the national debt had risen significantly to $10.626 trillion.

During the Bush 2.0 administration, the national debt increased by $4.858 trillion.

So far in the Obama administration, the national debt has increased by $5.39 trillion.

Make that last figure around $5.8 trillion by the end of this year.

Our “financial reckoning day” is fast-approaching…

Source:

Younglai, Rachelle. “UPDATE 3-U.S. gov’t poised to hit debt limit before 2013.” Reuters. 31 Oct. 2012. (http://www.reuters.com/article/2012/10/31/usa-debt-idUSL1E8LV2LU20121031). 1 Nov. 2012.

Tags: Barack Obama, debt ceiling, debt limit, Democrats, George W. Bush, national debt, Republicans, U.S. Treasury

Thursday, November 1st, 2012 Debt Crisis, Fiscal Policy, Government, Political Parties, Spending

2 comments on “U.S. To Reach $16.4 Trillion Debt Ceiling By End Of Year”

Troy on November 1, 2012 at 3:53 PM said:

“Our “financial reckoning day” is fast-approaching…”

The debt limit is just an artificial, political instrument.

With a new law Congress could raise it to $20T and business as usual would resume.

Not that I want the national debt to go to $20T, of course.

As for Bush vs. Obama, that’s rather deceptive.

The Bush years were more reliant on consumer debt take on 2002-2007, but that was stopped cold once all the suicide lending blew everything up in 2008.

http://research.stlouisfed.org/fred2/series/TCMDODNS

is the truer picture of the debt situation, total debt owed by households, non-financial businesses, and government.

Dividing by GDP:

http://research.stlouisfed.org/fred2/graph/?g=clx

gives the systemic leverage. That chart tells the actual story of what has been going on since the 1980s.

Reply ↓
- Editor on November 11, 2012 at 8:49 AM said:
  
  Thanks for the comment Troy.
  
  “Our “financial reckoning day” is fast-approaching…”
  
  The debt limit is just an artificial, political instrument.
  
  With a new law Congress could raise it to $20T and business as usual would resume.
  
  It’s not the “official” debt limit (which I wholeheartedly-agree is artificial) but rather the “sum of all fears” I was referring to when I spoke of our “financial reckoning day.”
  
  Thanks for sharing that FRED material with everyone.
  
  Reply ↓