June 3, 2012

Debt Limit Update: On Track to Hit the Ceiling Before Election Day

Filed under: Economy,Taxes & Government — Tom @ 12:02 pm

From Treasury reports at this interactive link:

  • The national debt as of May 31 was $15.771 trillion, $623 billion below the legislated $16.394 trillion limit.
  • In May, the national debt increased by $78.3 billion. In May 2011, it “only” increased by $57 billion.
  • From May 31 to October 31, 2011, the national debt increased by $649 billion.
  • If that $649 billion increase occurs again, the nation will reach its debt limit before October 31.
  • But as noted, the debt is increasing faster now than it was a year ago. That was also true in April, when the debt went up by a stunning $110.3 billion in what is Uncle Sam’s highest month for tax collections and when Treasury somehow reported a one-month surplus, vs. $17.5 billion in 2011).

As I noted about a week ago, everyone in Washington and in the establishment press assumes that we aren’t going to hit the limit until very late this year or very early in 2013. That would appear to the case only if Treasury Secretary Geithner chooses to engage in accounting maneuvers to delay hitting the ceiling. What’s to guarantee that he will?

My take is that Team Obama is cooking up a crisis for September and/or October — or at least allowing for the possibility for creating one if doing so is electorally opportunistic.

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