Burn rate: $2.2 trillion and rising
After lifting the U.S. debt limit by $290 billion just to make it through six weeks in December and January, Congress has now hiked it by another $1.9 trillion:
Feb. 4 (Bloomberg) — The U.S. Congress approved increasing the federal debt limit by $1.9 trillion, to $14.3 trillion, enough to prevent lawmakers from having to raise it again before November’s midterm elections.
The House voted 233-187 today to send the increase to President Barack Obama for his signature. The hike is more than twice the size of any of the four previous debt increases lawmakers approved in the past two years.
Adding the two hikes together, our current burn rate is $2.2 trillion a year, or about an 18% annual increase. The very fact of kicking the can past the Nov. 2010 midterm elections speaks volumes. It’s like an alcoholic saying, ‘Honey, I’m headed for rehab, but I’m laying in a couple of cases of vodka for my difficult period of sobriety which follows it.’
Obviously, our Congressional credit junkies haven’t kicked their dependency. They’re flicking their Bics to warm up another teaspoon of deficit smack, as they tourniquet their stippled forearms with surgical tubing to make their veins bulge whilst taking the solemn pledge of sobriety. Do you believe them? Watch their pinpointed pupils, and those sinister needles glinting in the darkness, and think twice.
For now, interest on the debt is running only slightly north of 10% of the runaway federal budget. But that’s with short rates pegged at zero, and long rates at an unaccountably low 4%. When these rates start to drift higher to their natural levels, the debt ceiling will go exponential: up $3.5 trillion in 2011; $6.0 trillion in 2012. No amount of fresh credit will ever provide the rush these debt-depraved débauchés remember from their rose-pedaled political youth.
Sorry, folks. This pornographic performance may end a bit earlier than scheduled. When the bond market screams ‘FIRE!’, please exit the theatre in as orderly a fashion as you can muster … recognising that the Halloween-masked emergency responders may not have your own best interests in mind.
This pornographic performance may end a bit earlier than scheduled. When the bond market screams ‘FIRE!’, please exit the theatre in as orderly a fashion as you can muster … recognising that the Halloween-masked emergency responders may not have your own best interests in mind.
[/quote]I’m betting no later than March…
[quote] Democrats said the pay-as-you-go changes showed they are serious about reducing the deficit. The plan will “usher out an era of irresponsibility and begin putting the country back on a fiscally sustainable path,” Obama said today in a statement. [/quote]
A 6-year old knows that is a bunch of non-sense. You can’t spend your way out of debt, by doubling down(or is tripling?) and being more irresponsible than the last administration!
Machinehead, sometimes I think your Dr.M’s alternate cyber-identity.
Davos, dont u think March is a bit too soon? With the stockm market looking like its going down again there is a strong possibility that the rush to safety will occur. I wouldnt buy long bonds but there are many on the street that have shown that they will if they think yields will drop even further.