The Bush administration borrowed another $62.6 billion in May. That’s slightly more than two thousand million a day added to our national tab, weekends included. Another way to look at it is that it’s more than twenty-three thousand a second, twenty-four hours a day added to your obligation. While you were reading this first paragraph, the government ran up your debt more than a hundred thousand dollars. And this is on top of the taxes you pay them.
Sometime in August, we will hit the ridiculous debt ceiling Congress continues to impose upon itself by pretending to limit the amount of money the nation can borrow; a gesture that obviously has no meaning whatsoever.
It was just last May 26, 2003, that Congress raised this crazy limit by $986 billion, keeping it just under one trillion so they didn’t frighten the public too much.
Now, with national elections due on November 2nd, the question is whether this will have an effect on George W. Bush’s chances for reelection. Will the public be upset by the fact that we’ve borrowed a trillion dollars in fifteen months or so?
The last time we hit the debt ceiling on February 22, 2003, the borrowholics went on the wagon for 92 days and the loyal laugh-a-lot media didn’t even mention the fact. Of course, once the debt ceiling was raised the borrowholics immediately made up for lost time. Can the Bush administration perform the same Enron style magic again? Of course it can.
None of this means that the sale of Treasury securities would stop. It takes billions per day to merely replace maturing securities and, heaven forbid, the government would not want the national debt to go down because they failed to replace these loans. The suspension of new and additional debt would just be a temporary holding action.
The real question is how long countries like communist China will continue to loan us more than $300 billion a year when they can get a better return on their money elsewhere. Already, about half of the securities tendered at “auction” are being turned down.
As of the end of May, we were $288 billion from the national debt ceiling. If you figure that at the rate of a little more than sixty billion a month this gives us another six or seven months you’re wrong.
The interest against the Social Security trust fund’s $1.57 trillion is due in June. Paying this interest by simply handing the trust fund more bonds useful solely for double taxation will increase the national debt about $80 billion by itself. Add another $60 billion or so in new borrowing on top of that and you’ve got an increase of $140 billion in this June alone.
The national debt is only one leg of the “perfect storm” many economists are predicting will make the Great Depression of the Thirties look like a picnic. No one is doing much of anything to stave off this looming crisis.
“Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact.”