The U.S. national debt on Wednesday surpassed
the $12.104 trillion limit imposed by Congress, hitting $12.135
trillion, according to CBS News. Without some "extraordinary accounting tools," as Mark Knoller reports, crossing this threshold would forbid the government from further borrowing. The debt ceiling is artificial, however, and Congress is acting quickly to raise it
so that the government retains access to funds. But it's an
embarrassing reminder of the gargantuan national debt that's accrued in
the past ten years, especially during the financial crisis and ensuing
efforts to end it. The level of panic varies pretty widely, but no one
thinks this is good news.
- Short-Term Solutions CBS News's Mark Knoller reports,
"A senior Treasury official told CBS News that the department has some
'extraordinary accounting tools' it can use to give the government
breathing room in the range of $150-billion when the Debt exceeds the
Debt Ceiling." He writes, "The Debt Limit has been raised about a
hundred times since 1940, when
it was $49 billion - about five days worth of federal spending now.
The White House projects a record $1.5 trillion dollars deficit this
year alone, and a 5-year deficit total of $4.97 trillion." Conservative legal blogger Jonathan Adler adds,
"[T]his doesn’t mean the government is about to shut down
or stop spending money — at least not yet. [...] Congress is expected
to increase the debt limit by $290 billion, if not more, in coming
- Wrong, Wrong, Wrong EconoBlogger Jonathan Adler calls this the "STUPIDEST THING I HAVE READ TODAY." He knocks Knoller's assertion that the national debt hit $12.135 trillion, "No it has not: as the Treasury says, the National Debt
is a different debt concept than the debt subject to the
Congressionally-mandated limit: the difference is made up of 'unamortized discount[s] on Treasury bills and zero coupon Treasury
bonds, miscellaneous debt (very old debt), debt held by the Federal
Financing Bank[,] and guaranteed debt.'"
- 'The Coming Debt Panic' The Washington Post warns,
"It's time to stop worrying about the deficit -- and start panicking
about the debt. To put it another way, short-term deficits aren't the
real problem. The punishing hangover of borrowed money is. The
ballooning national debt once looked like a long-term problem. Now, the
long-term has become the middle-term, fast-forwarded by the cratering
economy and the unavoidable and immense spending in the service of
saving it." They write. "Failing to do so will lower the national
standard of living and ultimately threaten America's economic
- Opportunity For GOP To Kill Spending 24/7 Wall Street's Douglas A. McIntyre advises,
"The only chance that Republican House members and other Congressmen
have to cap the rise of new spending bills is to put a ceiling on the
national debt. There are simply too many expensive programs such as
health care coming through the legislature which have too much support
to attack the federal debt issue one bill at a time," he writes. "If
there is one action that could derail the Administration’s spending
plans on health care, economic stimulus, and unemployment assistance,
it is an ad hoc decision by Congressmen who have little in common with
one another beyond a concern that the national debt will cause higher
taxes or unsupportable debt service. A vote to hold the debt ceiling
where it is would force the federal government to comb through programs
and take out what would have to be explained as 'non essential'
- 'Debt-Driven Panic' The Washington Post's David Broder worries, "In addition to robbing the country of the flexibility to deal with
future crises, the rapidly rising debt level could push up interest
rates, threaten the economic recovery, slow the growth of wages,
depress living standards, make the United States even more dependent on
foreign lenders and leave us vulnerable to a shock wave if those
lenders lose confidence in our ability to repay the loans."
Debt Limit Vote Reveals Dem Vulnerability Congressional Quarterly's Greg Giroux explains, "What was striking about the vote breakdown was that the overwhelming
majority of Democrats who voted no -- 32 of 39 -- are first or
second-term members who represent districts that they wrested from
Republican control. The GOP will be contesting many of these districts
in what they expect will be a more Republican-friendly 2010 election
midway through President Obama's term."
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