I just did a search on the internet and it looks like the traditional corporate media is not reporting a major fact.
The United States government seems to be operating in default (in other words, it’s broke).
From December 30, 2005:
Treasury Secretary John W. Snow said yesterday that the United States could be unable to pay its bills in early 2006 unless Congress raises the government’s borrowing authority, which is now capped at 8.18 trillion.
Snow, in a letter to lawmakers, estimated that the government is expected to bump into the statutory debt limit around the middle of February.
“At that time, unless the debt limit is raised or the Treasury Department takes authorized extraordinary actions, we will be unable to continue to finance government operations,” Snow wrote.
Several other traditional media sources also reveal that the debt ceiling is 8.18 trillion. The last traditional media story I can find is from January 8:
If consumers are overextended with credit, they’re not alone. The U.S. government is poised to exceed its charge card limit and may have to quit paying its bills unless Congress raises the national debt limit soon.
That’s what Treasury Secretary John Snow said in a recent letter to Congress, warning that unless the current 8.2 trillion debt ceiling is raised by mid-March, “we will be unable to continue to finance government operations.”
The reason I ask is because the Treasury Department says the current debt is at 8,190,567,748,779.48 as of January 26.
So is it 8.18 or 8.2 trillion dollars? U.S. Title 31 Subtitle III Chapter 31 Subchapter 1 § 3101 is where the information is listed.
Except right now it states 7.384 trillion. But it does add a note that Rule xLIX of the House of Representatives allows them to raise the debt ceiling. In 2004, there were several proposals to raise the debt ceiling but the one that passed into law is Public Law 108-415. It isn’t available directly online (via a search for Public Laws) as it is still at the “printing office”.
You can find it via a search for Senate Resolution 2986 from the 108th Congress. It states that the public debt ceiling is now 8,184,000,000,000.
In April 2005, the House and Senate wrote a bill to raise that debt ceiling to 8.965 trillion. According to the Library of Congress, that bill (passed by the House) has been referred to the Senate Finance Committee. It has however not been passed into law.
If the debt ceiling is 8.184 trillion and the current debt is 8.19 trillion, then the U.S. government is in default. Right this minute.
Who can forget the battles between Clinton and the Congress in 1995 when parts of the federal government shut down due to fact that the debt ceiling had been broached?
Either I’m wrong or else this story has not been reported. What is going on?
Crossposted from Flogging the Simian
Peace
I did read this once or twice in the financial blogs, but overall, your’e right, the TM has ignored this serious matter.
I understand that the children born today will immediately take on a twenty thousand plus debt to their lives…what a way to start. I hope the minimum wage goes up a nickel or two….
.
The Boston Globe (AP) Nov. 18, 2004 — Republican senators did not join in the debate, underscoring how politically uncomfortable the measure is for them. They had refused to bring the bill to a vote before the elections.
Administration officials urged lawmakers to act quickly. The government reached its $7.38 trillion borrowing cap last month, and since then the Treasury Department has paid federal bills by taking cash from a civil service retirement account, which it plans to repay.
”We are nearing the end of our rope, and it is critical that Congress act,” said Treasury spokesman Rob Nichols.
Failure to raise the debt ceiling could force a federal default and leave the government unable to pay Social Security recipients, federal workers, and other obligations.
The Senate took its debt-limit vote as congressional bargainers used the lame-duck session to continue writing a giant $388 billion spending measure to finance scores of agencies over the next 10 months.
“But I will not let myself be reduced to silence.”
▼ ▼ ▼ MY DIARY
Not that it says anything beyond what you already cite, but I was able to track down an online copy of Public Law 108-415 (PDF version; text version available here).
And here’s a copy of H.J. Res. 47, as read in the Senate on May 9, 2005 and forwarded to the Finance Committee.
So as of last Thursday, the U.S. Government is some $6.6 billion over the debt limit. It’s all just a bunch of Democrats’ and bureaucrats’ “fuzzy math”, so why should this Administration be concerned about it? Adherence to the clear letter of the law has never been a strong point of Bush and his coterie of enablers.
Thank you very much for this post, soj. Sincerely.
What simpler a concept exists that can help us reach our ‘detached’ fellow citizens as to the nature of our current leadership?
We are broke.
Regarding your closing question, I wouldn’t doubt at all that we’re seeing a negligence of reporting on this. It doesn’t fit the preferred overall narrative — which is meant to sustain a full belief in the boundless integrity of everything we are, rendering us faultless as a nation (& our leadership accordingly faultless).
Not to worry. Helicopter Ben takes over from Alan at 12.01am Feb.01. He’ll keep the presses rolling, print the money and drop it from his helicopter. Take him at his word, he did pledge.
So what’s another trillion? t replaces b; the debt ceiling will always be raised another notch or two by congress until ‘furriners’ refuse to buy our fiat paper. Anyone knows how much the debt grew since the king declared himself emperor? Ouch.
Heehaw. Hehe. And to think when the king was coronated in 2001, he inherited a surplus.
Oh my.
Busch has managed to bankrupt the largest economy in the world!
True, the US Government is already out of compliance with the law, nor can it legally borrow more money (that is, sell more T-bills)–but there is nothing to keep them from doing it illegally.
I mean what are you going to do? Sue? In what cout, before what judge? ;D
It’s not default until debtholders are stiffed.
The clock is ticking, though!
I agree with you, Gaianne, that it is an exaggeration to say that the US Govt has defaulted. Snow is suggesting that they may have to default unless Congress increases the borrowing limit, while the import of soj’s piece is that perhaps the US Govt should already have defaulted but has not done so due to borrowings contrary to PL108-415.
As a mischievous-minded bureaucrat myself, I wonder, though, whether there is some qualification in PL108-415 or elsewhere about the definition of ‘debt’ (ie defining it on a different basis to the linked Treasury figure) or the date at which it should be measured (so that short-term exceeding of the limit may be allowed). And what does Rule xLIX of the House of Representatives say about increasing the ceiling?
Interesting research and diary, thanks, soj.