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US Ends June With $13.2 Trillion In Debt, Adds $210 Billion In Total Debt, On Track To Breach Debt Ceiling In Under Six Months

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US Ends June With $13.2 Trillion In Debt, Adds $210 Billion In Total Debt, On Track To Breach Debt Ceiling In Under Six Months

Post  TBQ on Tue Jul 06, 2010 2:46 pm

By Tyler Durden

In case one is wondering why the House Democrats attached a document to the emergency war supplemental bill that "deemed as passed" a non-existent $1.12 trillion budget, which basically allows the ruling party to start spending money for Fiscal Year 2011 without the constraint of an actual budget, here is the answer: on June 30, the US closed the books with just over $13.2 trillion in total debt, an increase of $210 billion in one month, or $2.5 trillion annualized. There is just $1.1 trillion left on the ceiling. As we have long been warning, at the current run rate, the ceiling will be breached in under six months, or just around November 2. More disconcerting is that the monthly debt roll continues to be in the "ridiculous amount" category, hitting a total of $660 billion, of which $583 billion was rolling off Bills (we are not sure what the $19 billion im "GSE investment" was for, but we are fairly sure the words Ponzi and Perpetuation are part of it). Of course, if America knew that according to the Obama non-existent budget the debt ceiling would be breached in 2010, it may not have a favorable reception among those few who are still willing to vote for either party of the bipartite farce that passes for a government.

Debt June

Notes:
http://www.washingtonexaminer.com/opinion/columns/Democrats-deeming-themselves-defeated-come-November-97809649.html
https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=10063000.pdf


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Re: US Ends June With $13.2 Trillion In Debt, Adds $210 Billion In Total Debt, On Track To Breach Debt Ceiling In Under Six Months

Post  TBQ on Wed Jul 07, 2010 3:42 am

Now that America is on record spending autopilot and nobody cares or knows just what the 2010 deficit pattern of the government will look like, and, more importantly, the debt issuance, we have compiled historical quarterly data comparing the change in US deficit and debt data. As the chart below demonstrates, over the past 10 quarters, on average the US had added $400 billion in debt each quarter, while increasing its deficit by about $275 billion, with debt issuance surpassing any given period's deficit by almost 50%. To be sure, the data in the debt change is skewed by the outliers of Q3 and Q4, which were not so much an increase in term debt, but a massive issuance in short-term debt holdings, as the entire world scrambled to place their money into ultra-secure 30 Day and other Bill securities.

As a result of these two debt outlier points, the US is now stuck with rolling over half a trillion in short-term debt on a monthly basis. Either way, it is obvious that it will likely be impossible for the US to trim it quarterly debt issuance materially below $400 billion per quarter, and will likely see this number increasing as tax receipts continue declining.

Additionally as quarterly deficits are unable to drop below $300 billion (note the Q2 '10 data excludes June deficit data), once interest rates start climbing, look for these numbers to surge once ever greater portions of the US deficit go to simply pay the interest on the federal debt. Bottom line, with the US expected to generate a deficit of about $1.5 trillion in the next fiscal year, the napkin estimate says that the US will likely incur between $2 and $2.5 trillion in debt over the next year. And now you know even better why the administration is now spending money with no blueprint whatsoever.

The Chart: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trichet/Debt-Deficit.jpg

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