And so, a little over a year after the last debt ceiling melodrama, in which the US kicked the can on its maximum borrowing capacity to this Sunday, March 15, in the meantime raking up total US public debt to $18.149 trillion…
… the soap opera with the self-imposed borrowing ceiling on America’s “credit card” is back, and the US is once again faced with sad reality of its debt ceiling (now at well over 100% of America’s upward revised GDP of $17.7 trillion). Tthe reason: two days from today Congress’s temporary suspension of the debt ceiling, which was approved in February 2014, ends.
As Bloomberg reports, Treasury Secretary Jacob J. Lew called on lawmakers to raise the country’s borrowing limit and avoid playing politics when the U.S. government’s credit rating is at stake.
The creditworthiness of the United States is not a bargaining chip, and I again urge Congress to address this matter without controversy or brinksmanship,” Lew wrote in a letter Friday to House Speaker John Boehner and the rest of the legislature. The Treasury Department on Friday suspended sales of its state and local government series of non-marketable securities, one of the initial moves it makes to avoid exceeded the federal government’s debt limit.
Lew said he’s also declaring a “debt issuance suspension period” as of Monday with respect to the Civil Service Retirement and Disability Fund, and will suspend daily reinvestment of Treasury securities held by the Government Securities Investment Fund of the Federal Employees’ Retirement System Thrift Savings Plan.
The department has made similar moves in previous debt ceiling debates, using the tools to stay under the borrowing cap.
So-called “slugs” securities are sold to states and municipalities so they can comply with federal tax laws and arbitrage rules when they have money to invest from their issuance of tax-exempt bonds.
The U.S. probably doesn’t need to raise the debt ceiling until October or November, according to a Congressional Budget Office analysis. While U.S. lawmakers have struggled to raise the debt limit since Republicans won control of the House in 2010, nearing the brink of default in 2011 and 2013, Senate Majority Leader Mitch McConnell has pledged that there will be no default or government shutdown this time around.
The good news is that all the comedic idiocy surrounding the “trillion dollar platinum coin” is about to be unleashed upon a zombified US audience onc more, while the most important message: that $1 dollar of debt can’t even buy $1 dollar of GDP, is once again lost on everyone.
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