Busting The Nation’s Credit Card
That was quick. It took less than 24 hours for the federal government to chew through a majority of the debt-ceiling magic money Congress approved earlier this week. This from the Washington Times:
U.S. debt shot up $239 billion on Tuesday — the largest one-day bump in history — as the government flexed the new borrowing room it earned in this week’s debt-limit increase deal.
The debt subject to the statutory limit shot way past the old cap of $14.294 trillion to hit $14.532 trillion on Tuesday, according to the latest the Treasury Department figures, which are released on the next business day.
That increase puts the government already remarkably close to the new debt limit of $14.694, which means one day’s new borrowing ate up 60 percent of the $400 billion in space Congress granted the president this week.
To put that in sobering perspective, US borrowing now tops 100 percent of the nation’s GDP.
The last time US debt topped the size of its annual economy was in 1947 just after World War II. By 1981 it had fallen to 32.5 percent.
Ratings agencies have warned the country to reduce its debt-to-GDP ratio quickly or facing losing its coveted AAA debt rating.
Moody’s said Tuesday that the government needed to stabilize the ratio at 73 percent by 2015 “to ensure that the long-run fiscal trajectory remains compatible with a AAA rating.”
After the debt deal was signed, sealed and delivered, Rep. Michele Bachman, a contender for the GOP presidential nomination who voted against hiking the debt ceiling, said doing so is “like saying we embrace being Greece.”
She was depressingly close. We’re not quite there yet, but the new borrowing puts the US “in a league with highly indebted countries like Italy and Belgium.”
So we got that going for us.
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