$8.184 trillion is not enough

techweenie · techweenie's Garage

The borrow-and-spend Republican tradition continues:

US government warns it's running out of cash

Treasury Secretary John Snow has warned that unless Congress raises the national debt limit, the US government will run out of cash to finance its daily work in two months.

In a letter to Senate leaders Thursday, Snow said the statutory debt limit imposed by Congress of 8.184 trillion dollars would be reached in mid-February and the government would then lose its borrowing power.

"At that time, unless the debt limit is raised or the Treasury Department takes authorized extraordinary actions, we will be unable to continue to finance government operations," said the letter, seen by AFP.

Snow warned that even if the Treasury took "all available prudent and legal actions" to avoid breaching the ceiling, "we anticipate that we can finance government operations no longer than mid-March".

"Accordingly, I am writing to request that Congress raise the statutory debt limit as soon as possible."

The Republican-led Congress last voted to increase the debt limit in mid-November 2004, despite opposition from Democrats who demanded the free-spending federal government tighten its belt instead.

The US debt limit sparked bitter partisan battles in the mid-1990s between a Republican-dominated Congress and the Democratic administration of president Bill Clinton, leading to shutdowns of the federal government.

Once the US government hits the ceiling, it comes under threat of defaulting on its debts and can lose the ability to raise future credit on the capital markets.

Snow underlined that the "full faith and credit of the United States" was a unique selling point on the markets.

"A failure to increase the debt limit in a timely manner would threaten this unique and important position," he wrote in his letter.

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Fortunately, Congress will raise the debt ceiling again, so that important programs like $250 million bridges in Alaska can proceed.

beepbeep · 01-02-2006, 08:40 AM

Ahh, it's nothing. Just print more money

island911 · 01-02-2006, 08:51 AM

The sky is falling . .. THE SKY IS FALLING . . .and it's all the Repulicans fault!

GW hates skys.

beeper has the right idea; print more money. not only do you pay the debt, but the dept doesn't cost as much, due to devalued $.

beepbeep · 01-02-2006, 08:53 AM

Yupp, and thanx to devalued $ I can buy more from PP (which in turn stimulates economy, right?)

island911 · 01-02-2006, 09:02 AM

yep.(which in turn, drives your economy to devalue it's $ (Kr?) to increase it's exports, right?)

on-ramp · 01-02-2006, 09:07 AM

here comes a tax raise.

techweenie · techweenie's Garage

Quote:

Originally posted by beepbeep
Ahh, it's nothing. Just print more money

Yeah, we'll need something cheaper to burn this winter than natural gas! (Maybe you guys will, too!)

island911 · 10:55 AM

Quote:

Originally posted by on-ramp
here comes a tax raise.

Well thats the beauty of inflation .. . bracket creep - no tax raise needed.
Jimmy Carter showed us the way.

BGCarrera32 · 01-02-2006, 09:46 AM

Its rather hypocritical when one party blames the other for spending and running up the debt. Both sides are guilty of playing the game. Democrat or Republican most of these guys in office have a limited financial education. Sadder yet is that the majority of the American public has their head in the sand and has a bad enough time with their own finances, let alone their countries. I am a conservative and a capitalist through and through and find the current situtation deplorable. Running debt to acquire assets that pump money back into the economy and provide a return while paying the debt back is one thing; 8.184 trillion of *very* questionable squandering is quite another.

beepbeep · 01-02-2006, 09:47 AM

Quote:

Originally posted by island911
yep.(which in turn, drives your economy to devalue it's $ (Kr?) to increase it's exports, right?)

Yeah, but inflation is not kind to savers and good to loaners, which skews things in unpleasent way.

turbo6bar · 01-02-2006, 10:10 AM

Quote:

Originally posted by beepbeep
Yeah, but inflation is not kind to savers and good to loaners, which skews things in unpleasent way.

Is it necessarily good for loaners? Persistent inflation erodes the value of future dollars used to repay the loan.

Print more dollars = more inflation = Bernanke forced to act = FED rates raised = ....

Reduced spending is an option, among others, that should be considered.

Burnin' oil · 01-02-2006, 10:44 AM

OUT OF CONTROL

Nathans_Dad · Nathans_Dad's Garage

I'm with Tech, time for some serious budget cuts!!

I'm sure there is a few million in pork alone in the budget each year...maybe a billion.

techweenie · techweenie's Garage

Quote:

Originally posted by Nathans_Dad
I'm with Tech, time for some serious budget cuts!!

I'm sure there is a few million in pork alone in the budget each year...maybe a billion.

Rick, I'll bet it's easily over $100 billion. so much is buried in otherwise noble-sounding legislation -- laws that usually aren't even read by the people voting on them -- that 'stuff' just leaks through every day.

Lots of attempts are made to add pork to bills. Everything that sticks usually has a well-funded lobbying group pushing it.

Here's some light reading:

http://www.whitehouse.gov/omb/budget/fy2006/

turbo6bar · 01-02-2006, 02:23 PM

Quote:

Originally posted by Nathans_Dad
I'm sure there is a few million in pork alone in the budget each year...maybe a billion.

A billion!

They need to try a lot harder than that. We're probably running a billion dollar deficit per day.

Flatbutt1 · 01-02-2006, 02:56 PM

Well we've forgiven other nations the debts they owe us, so if charity begins at home let's just forgive ourselves our debts and start over.

on-ramp · 01-02-2006, 03:00 PM

so the government is in defication, i mean deficit, how those words are similar.
anyway, who do they owe all this money to, where was it borrowed from?

tabs · 01-02-2006, 03:07 PM

A BILLION $$$$ AIN'T WHAT IT USED TO BE!!!!...Bunky Hunt

Anyway that said..one of the Txas boyz I recently talked to said that Bushy is purposely running the defceits to DEVALUE the $$$$...So that all those FOREIGNERS WHO ARE HOLDING $$ or DEBTget less for their money...That is a round about way of negating a debt...payem back with cheaper $$$$...

SlowToady · 03:11 PM

Quote:

so the government is in defication, i mean deficit, how those words are similar.
anyway, who do they owe all this money to, where was it borrowed from?

Note that I haven't read the articles posted, so I don't know any particulars. However..

IIRC, the majority of the American debt is owed to.....Americans. We borrow the money from ourselves, and promise to pay it back.

edit()

By "we", I mean, the public sector, e.g. the government, borrows the money from the private sector, e.g. you and I, etc, and promises to pay the private sector back.

anh911 · 01-02-2006, 03:18 PM

" Democrat or Republican most of these guys in office have a limited financial education. "

GW holds an MBA from Harvard.

"Well we've forgiven other nations the debts they owe us, so if charity begins at home let's just forgive ourselves our debts and start over."

Only ptroblem is - it's not out debt to forgive, it's mostly foreign owned debt.

"The sky is falling . .. THE SKY IS FALLING . . .and it's all the Repulicans fault!"

I want my 2 cents back...