The Bipartisan Budget Act of2015 suspended the statutory debt limit through Wednesday, March 15, 2017. Beginning on Thursday, March 16, 2017, the outstanding debt of the United States will be at the statutory limit.
Bear in mind that the US Public Debt has doubled since August 2008. And the debt ceiling has been raised (and then suspended) 12 times since 2005.
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But here we sit with Treasury burning cash at a staggering rate of speed. The Treasury’s cash balance is rapidly approaching zero. In other words, Uncle Sam will likely run out of money very shortly. Take a look how the Federal government spends your money.
Other than budgetary tricks, what is Treasury Secretary Steven Mnuchin to do? Any hopes for a surge in revenue thanks to proposed tax cuts are a long way off (when and if the Congressional sausage grinder turns out another contaminated pork product). And real GDP growth is less than the growth rate of public debt. And with Q1 2017 GDP growth forecast to be an abysmal 1.2% (by the Atlanta Fed’s GDPNow service), the short-term prospects for growing a budget surplus is extremely limited.
Secretary Mnuchin did write House Speaker Paul Ryan a plea to raise the debt ceiling. And, of course, Congress WILL raise the debt ceiling in order to avoid a default on US public debt. We can see the “sea of tranquility” in US credit default swaps.
So, once the Kabuki theater of endless drama ends, Congress will raise the debt ceiling. Even with “mandatory” spending (e.g. Social Security, Medicare, and Medicaid, SNAP, unemployment compensation, etc.) blowing out of control. It is highly unlikely that Congress will do anything to curtail entitlement programs or even make common sense changes to Obamacare to reduce the cost of healthcare in the US. But they will turn out more contaminated sausage from The Federal meat grinder!
Instead, our media is obsessed with President Trump putting ketchup on his well-done steak. That alone qualifies as a national security threat!! /sarc
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