During the final days of November, when retailers luted Christmas shoppers in anticipation of showing a profit for the year, the U.S. Treasury hit a new milestone in its production of red ink — the government is now $18 trillion in debt.
Tyler Durden, writing for Zero Hedge, reported:
Last week, total US debt was a meager $17,963,753,617,957.26. Two days later, as updated today, on Black Friday, total outstanding US public debt just hit a new historic level which probably would be better associated with a red color: as of the last work day of November, total US public debt just surpassed $18 trillion for the first time, or $18,005,549,328,561.45 to be precise, of which debt held by the public rose to $12,922,681,725,432.94, an increase of $32 billion in one day.
The United States hit this record amount of debt despite having earlier reported record tax revenues for fiscal year 2014 — $3 trillion for the very first time in a single year. CNS News reported in October:
Inflation-adjusted federal tax revenues not only hit a record high in fiscal 2014, but marked the first time that tax revenues have ever topped $3 trillion, according to the latest Monthly Treasury Statement. In fiscal year 2014, inflation-adjusted federal tax revenues hit a record $3,020,848,000,000, but the federal government still ran a $483,350,000,000 deficit during that time.
It’s also worth noting that although tax revenues have steadily increased each year that President Barack Obama has been in office, his administration has managed to add more than $7 trillion to the national debt. “It also means that total US debt has increased by 70% under Obama, from $10.625 trillion on January 21, 2009 to $18.005 trillion most recently,” Zero Hedge reported.
When then-Sen. Obama campaigned for the presidency in 2008, he often mocked George W. Bush for adding $4 trillion to the national debt. HotAir reported that at one appearance he remarked:
The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents – #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.
Here’s a video of that speech. Story continues after the clip.
What’s more troubling is the manner in which the Treasury meets it’s debt obligations. It simply issues new debt to cover the old.
CNS Editor-in-Chief Terence P. Jeffrey has a name for it. He calls it a Ponzi scheme.
He reported last week that the Treasury had, in a recent 8-week period, issued $1 trillion in new debt to pay for the old. According to CNS News:
The only way the Treasury could handle the $942,103,000,000 in old debt that matured during the period plus finance the new deficit spending the government engaged in was to roll over the old debt into new debt and issue enough additional new debt to cover the new deficit spending.
This mode of financing the federal government resembles what the Securities and Exchange Commission calls a Ponzi scheme.
U.S. Treasury Secretary Jacob Lew testified before the Senate Finance Committee in October, 2013, requesting that Congress raise the debt limit.
“Every week we roll over approximately $100 billion in U.S. bills,” Lew told the committee, according to CNS. “If U.S. bondholders decided that they wanted to be repaid rather than continuing to roll over their investments, we could unexpectedly dissipate our entire cash balance.”
Are we scared yet?