Thursday, January 28, 2010

Senate Votes to Increase Debt Limit to $14.3 Trillion

Hmmm, I thought we were taking steps to rein in the deficit?  Oh wait, that was last night... today is a new day. 

As always watch what they do, not what they say. 

I was reading about today's vote last night and it appears politicians did not want to vote twice before November elections on increasing the debt limit, so rather than an incremental approach of "only" $900 BILLION now (with another increase later in the year) they decided to just do a massive increase of $1.9 TRILLION in one fell swoop.  That way, there is only one bad news story instead of two, with the latter coming near to elections.  This way Americans will have forgotten about the increase by November.  Or so they think. And with that our national debt ceiling nor surpasses the size of the entire US economy. 

Anyhow remember this story as we celebrate the "bought and paid for by our grandchildren" GDP figures tomorrow morning.
  • Senate Democrats passed a $1.9 trillion increase in the federal debt limit Thursday, seeking to push off another politically painful debt vote until after the midterm elections.
  • All 60 Democrats and no Republicans voted for the debt limit increase. The measure, which the House has yet to vote on, would put the debt ceiling at roughly $14.3 trillion.   Sen. Paul Kirk (D-Mass.) voted for the debt increase. Sen.-elect Scott Brown (R-Mass.), his replacement, has not been seated.
  • Democrats said the move is necessary because the debt is approaching its current ceiling of $12.4 trillion. If the debt breaches the limit, the government would lose its borrowing authority and risk default.
  • If the House agrees to the $1.9 trillion debt ceiling hike, lawmakers won't have to make another debt vote until 2011.  (aka - AFTER the November 2010 elections)
  • "We have gone to the restaurant, we have eaten the meal; now the only question is whether we pay the check," said Sen. Max Baucus (D-Mont.) in urging his colleagues to increase the limit.

Respectfully Mr. Baucus, we've hoisted a tent at the buffet line and only leave the restaurant for shopping trips.

It's Greece you're worried about?  Put those off balance sheet liabilities (hello Medicare) back on the US balance sheet along with our "unlimited liabilities for the next 3 years) @ our new friends Fannie and Freddie and you've got Greece right here.  Tick Tock. []

[Jan 14, 2009: First Quarter Fiscal 2010 US Deficit 16% Higher than Record 2009 Levels]
[Aug 24, 2009: Cumulative Deficit Estimate for Next Decade Increased by $2 Trillion.... Since May]
[Jun 12, 2009: NYT - America's Sea of Red Ink was Years in the Making]
[May 29, 2009: In 1 year, US Taxpayer on the Hook for $55,000 More per Household]

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