Predictable: Treasury Department Adds Record Debt the Day after Congress Eliminated Debt Ceiling

The October 2013 government shutdown agreement resulted in Congress temporarily(?) removing the debt ceiling. As predicted in a previous post, Treasury has now added a record, $328 BILLION in unrecognized debt to the U.S. public debt in a single day--nearly a third of a TRILLION dollars in debt. This "new" debt was kept off the public debt to avoid exceeding the legal debt limit. The money has already been spent and was "borrowed" from a variety of other public funds including the retirement plans for federal employees. From the chart, even after adding $328 BILLION, Treasury will likely add another $25 BILLION in the next following days, until the actual public debt approaches the blue dashed trend line.

The following chart shows the daily increase or decrease in the U.S. national debt, measured in billions of dollars. It's the same information as above but only presents the day-to-day changes in the debt. The previous record increase followed the 2011 debt-limit debate when Treasury dropped $238 BILLION of off-the-books debt onto the public debt. The latest debt-limit impasse lasted longer and Treasury built up significantly more off-the-books debt. As a result, as soon as Congress removed the limit, Treasury officially recognized $328 BILLION in "new" debt.

Even a drunken sailor can predict that our current debt trajectory is "unsustainable." So what do we do about it?

• Congress and the President must craft and PASS an actual budget. The U.S. government has continued to operate without a formal budget for most of President Obama's tenure.
• Congress needs to vote on the fiscal reforms proposed by the Bowles-Simpson debt commission charted by President Obama.

See also ...

Is the U.S. Treasury Hiding Debt (Again)?

http://soquelbythecreek.blogspot.com/2013/07/is-us-treasury-hiding-debt-again.html

The Debt Ceiling and Where Do You Hide $238 BILLION?

http://soquelbythecreek.blogspot.com/2011/08/debt-ceiling-and-where-do-you-hide-238.html