This is the change we’ve been waiting for. The national debt has soared to unprecedented levels. In fact, we could have less than a week before we hit the national debt ceiling. Hey, maybe we should start cutting spending. Oh, never mind. Politicians have a lot more fun handing out goodies to voters, on the backs of our children.
As set in a law passed by Congress and signed by President Barack Obama on Feb. 12, 2010, the legal limit on the national debt is $14.2940 trillion. As of the close of business Tuesday, according to the Daily Treasury Statement released at 4:00 pm today, the portion of the national debt subject to this legal limit was $ 14.268365 trillion. (The total national debt, including the portion exempted from the legal limit, was $14.3205 trillion.)
This left the U.S. Treasury with the authority to borrow only an additional $25.635 billion before it hits the statutory debt limit.
On April 4, Treasury Secretary Timothy Geithner sent a letter to Senate Majority Leader Harry Reid (D.-Nev.) in order to warn Congress that the Treasury was approaching the legal debt limit. In an appendix to this letter, Geithner pointed to the rapid pace at which new debt was accumulating.
“On average,” Geithner wrote, “the public debt of the United States increases by approximately $125 billion per month (although there are significant variations from month to month).”
In a 31-day month, $125 billion in new debt works out to an average of $4.03 billion in new debt per day. At that pace, the $25.635 billion in legal borrowing authority the Treasury had left at the close of business on Tuesday would be exhausted in less than seven days.
Read on, if you can handle it. It could happen even sooner, by the end of the week! Oh, and the debt ceiling was about $4 trillion less when Obama was inaugurated. He’s been racking up over $4 billion in debt per day. That’s some record he’s got there.
Better still, depending on your perspective, if the price of gas continues its upward trajectory, we could be looking at paying $6 per gallon at the pump by summer. Everything is going according to plan! CNBC reports that’s the likely scenario if the dollar continues its slide. With the amount of debt we’re carrying, how likely is it we won’t see a continued decline of the dollar?
A dollar plumbing three-year lows is hitting Americans squarely in the gas tank, and one economist thinks it could drive prices as high as $6 a gallon or more by summertime under the right conditions.
With the greenback coming under increased pressure from Federal Reserve policies and investor appetite for more risk, there seems little direction but up for commodity prices, in particular energy and metals.
Weakness in the US currency feeds upward pressure on commodities, which are priced in dollars and thus come at a discount on the foreign markets.
One result has been a surge higher in gasoline prices to nearly $4 a gallon before the summer driving season even starts, a trend that economists say will be aggravated as demand increases and the summer storm season threatens to disrupt oil supplies.
“All we have to have is a couple badly placed hurricanes which could constrain some of the refinery output capacity in some key locations,” says Richard Hastings, strategist at Global Hunter Securities in Charlotte, N.C. “If you get weakness in the dollar concurrent with the strong driving season concurrent with the impact of one or two hurricanes in the wrong place, prices could go up in a quasi-exponential manner.”
All sarcasm aside, is there any doubt out there that Obama’s policies are a disaster? But of course, he’ll continue on his perpetual campaign, blaming everyone else while refusing to accept any responsibility for his failed policies. And the media will give him a pass.
Linked by Maggie’s Notebook – thanks!