On March 16 of 2015, the US Treasury officially hit what was then the US statutory debt limit of $18.113 trillion. At that moment the Treasury started using “emergency” measures to fund itself while the total reported debt remained unchanged and just dollars below the technical debt limit. This prompted much confusion among the punditry, leading to questions how is it that for many months the US has not updated its official debt number.
The reason is that until last Friday, the US had no official debt deal and as a result was unable to show legally the official current debt holdings.
As of Friday, this peculiar situation has been resolved following the latest deal by both parties to suspend the debt ceiling until March 2017 which also means that we finally got an updated total public debt number.
And so, after 162 work days without an update, the latest US debt number is $18,492,091,120,833.99 (yes, and 99 cents), an increase of $339.1 billion since the latest official pre-debt ceiling update. This is also 102.5% of GDP.
And what is the new debt ceiling? Funny you should ask, because as noted above as part of the debt deal, the debt ceiling was “suspended”, not revised which means that as of this moment the US officially no longer has a debt ceiling.
Why is the debt ceiling suspended? Simple: as we calculated two weeks ago, to provide enough room until March 2007, the total capacity on the US credit card would have to be $19.6 trillion. The problem is that while “selling” democrats the optics of a number that rounds up to $20 trillion would not be difficult at all (the only complaint would be why it is not $200 trillion), for many conservatives the realization that a GOP-controlled Congress just gave the US a blessing to issue another $1.1 trillion in debt would hardly be enjoyable.
So what did Congress, both democrats and republicans, do? They decided to do away with the debt ceiling entirely, “temporarily” of course, so as not to show what the next debt target for the US will be. And once March 15, 2017 arrives up what then? Why the temporarily suspended debt limit will be extended for another 2 years, “temporarily” again. Because while US representatives don’t have the courage to tell their electorate what the number is, they also don’t have the guts to do away with the debt ceiling entirely either.
And now: we look forward to the story about the next $43 million gas station somewhere in Afghanistan.
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