Reuters reports that, in informal discussions on the debt ceiling, the Treasury Department floated the figure of raising the debt ceiling $2 trillion, to $16.3 trillion, in order to avoid having to deal with the issue again before the 2012 elections. At an estimated 20 months of extension, that would be an annual rate of $1.2 trillion in additional debt. Worse, Reuters estimates that a “mere” $2 trillion in new debt won’t be enough to get the US to 2013.
Going back through the debt archives, the total public debt outstanding was at $5.728 trillion just before President George W. Bush took office and $10.628 trillion when he left. I may be but a public school graduate, but the approximate-$5.8 trillion of debt that would be added in President Barack Obama’s first term if the $2.0 trillion debt-limit increase is just enough to get to January 20, 2013 would be a new record for any President’s reign.
To show what an armchair budget-geek I am, let me tell you why the underlying factual premise of this piece is false.
The debt ceiling is $14.3t. The gross national debt is approaching that figure. The gross naional debt has both real, publicly-held debt, and phony paper “intragovernmental” debt such as the SS trust fund.
Re-write budget accounting rules so that only true debt counts toward the ceiling, and we can rack up another $4t!
There’s a slight problem with your proposal – that intragovernmental debt is already beginning to be converted to publicly-held debt.
I fully understand that, and the payroll tax holiday is speeding up the pace. You illustrate my point perfectly, because even if we hit the debt ceiling we will continue to issue debt as intragovernmental debt is converted. That’s why I think using the gross national debt figure is a sham because we can still issue debt without increasing the national debt (that’s just bizarre by Main Street standards).
Well so what’s another Trillion or two.
http://theeveningchronicle.blogspot.com/2011/05/so-whats-another-trillion-or-two.html