US Debt Update: 6 Months To Revised Debt Ceiling Breach

Tyler Durden's picture

Just in case some people forget what the trade off to the market melt up is, today we are starting a periodic daily report of the Treasury's total debt subject to the statutory limit. Today's total: $12,607,140,000,000. We started March at $12,383,717,000,000. We started the fiscal year (October 1) at $11,853,434,000,000. We have added $223 billion of debt in the last three weeks, and $755 billion in just 5 months. As a reminder, the debt limit is $14.3 trillion. We are $1.7 trillion away from the limit. At March's run-rate of about $300 billion per month, the debt ceiling will be breached by  October 2010. If somehow the government manages to reduce the monthly issuance to "just" $200 billion, we have eight and a half months until breach, or January 2011.

Carry on.

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Mako's picture

And the spending is not nearly enough, Z1 report shows credit creation going negative for 3rd straight quarter even with the 1.5-2T of federal government spending.  The government has the economy on lifesupport unfortunately it does not have unlimited power to supply the equation needs.

It's over folks.

Then it comes to be that the soothing light at the end of your tunnel
Was just a freight train coming your way

AR15AU's picture

Meh, if it gets bad enough, they'll just take interest rates down to -5%, and then refinance the whole ball of wax using 30 year notes.

Blithering ORSA's picture

Awesome!  -5% Intrest.  I'll pay you to take my currency!


That reminds me of the old comedy skit.  "Take my wife.  Please!"

Blithering ORSA's picture

What, the healthcare Reform Act won't bring in enough revenue?  Blasphemy, I say! Blasphemy!

Racer's picture

Why do they bother to call it a ceiling any more?

Isn't it more like a lift going up a shaft?


tmosley's picture

More like a shaft going up you.


Hondo's picture

Completely insane.  There is no way this will ever be paid back or even the interest.  We're just going to give the creditors more paper until they wont' take it. We are seeing stocks moving up in tandem with debt..........there is no way this is going to end well.  It is clearly a Ponzi casino and when it ends it’s going to be very nasty.  It won’t end because we’ve made it to nirvana either.



Mako's picture

Total debt/credit of the US system could never be paid, it's an impossibility from day 1.

The current US system is $52.7T at the end of Q4.   The Federal government is $12T of that.  

A credit system is never able to pay it back, what would you pay it with?

TraderMark's picture

Remember, dumping debt on the next generation is ok.  Because we won't ever pay it back, it will be defaulted on quietely via inflation.  Even the mainstream financial media is on board with that stategy.  So in the end, Cheney was right - deficits don't matter because people will gladly give us money the world over and if no, Ben (Janet) will.

ozziindaus's picture

I never understood how anyone thought you could slowly decrease the debt through inflation. Yields rise with inflation since the bond market is always smarter than and a few steps ahead of the Treasury/Government and therefor such a maneuver actaully increases the debt.

Now if the gov. was foolish enough to just pay the debt off with fresh money, then I guess they have just found a bigger fool to accept it. 

Lionhead's picture

"Completely insane.  There is no way this will ever be paid back or even the interest."

Got Gold?

Mako's picture

Gold does not save you anymore than Gold saved a Jew in being shoved in the German ovens.  The system runs on credit, when the credit system fully collapse there isn't any amount of gold that is going to save anything.

Shameful's picture

Uh, my family was saved by gold.  They bribed their way out of Soviet occupation in WW2 so I know in some cases gold can save your life.  Maybe you won't get change in your negotiations but family history tells me when the chips are down gold can get your ass out of the fire.

But then again feel free not to buy gold.  Your call but I will. I got a feeling that just as gold has saved lives in times of turmoil before it will once again rise to the occasion.

Fritz's picture

Debt level concerns are so yesterday.

uno's picture


1,000 X 1 billion = 1 trillion (1012)
1,000 X 1 trillion = 1 quadrillion (1015)
1,000 X 1 quadrillion = 1 quintillion (1018)
1,000 X 1 quintillion = 1 sextillion (1021)
1,000 X 1 sextillion = 1 septillion (1024)
1,000 X 1 septillion = 1 octillion (1027)
1,000 X 1 octillion = 1 nonillion (1030)
1,000 X 1 nonillion = 1 decillion (1033)
1,000 X 1 decillion = 1 undecillion (1036)
1,000 X 1 undecillion = 1 duodecillion (1039)

Other very large numbers are:
One googol = 10100
One googolplex = 10googol
One googolplexian = 10googolplex

Mako's picture

I never understand why people think those are big numbers.

What is the difference between 0.1 and 1 or 1 million or 1 billion or .00000001, nothing if you don't have scale.

At the end of the day the system can run for about 60 years, you can make it a little longer but the power needed to keep the equation going becomes very unsustainable. 

ozziindaus's picture

Exactly, all they have to do is change the currency and announce we are only one thousand monkeyturds in debt.

Mako's picture

The amount is mostly irrelevant, what the scale or what it represents is everything. 

The system is unsustainable, just like the one prior to 1944 or the one before the collapse of 1872 or the collapse of 1807.

There is nothing that can save the SYSTEM or global credit system, there will never be a solution... you will witness the solution.

You can possibly save your State, but the States better wake up quick.


Hulk's picture

Never thought I would see debt expressed in light years.

rubearish10's picture

Are these the next paper denominations, Zimbabwe style?

4shzl's picture

The 800-lb. gorilla is expanding his turf at the rate of $200/300 billion a month.  Think it's getting crowded in the national balance sheet cage?  For you maybe, but not for him.  Think Mr. Market's gonna cut him down to size?  Dream on -- in history's long march, coercive power (government) trumps markets and private enterprise every time.

merehuman's picture

Nothing trumps math. ask Denninger. LOL

ThreeTrees's picture

Except when it lays them low, ie: Rome.  And the market very nearly ruined all the world's governments two years ago.  Government can kick the can down the road, but debt is real.  It doesn't bend to their will forever.

Hansel's picture

Debt is money.  We're getting rich!!!

Mako's picture

Debt is not money but we now use it as money.  

Hansel's picture

Thanks for clearing that up.  We're getting rich!!!

Mako's picture

Actually no.  Debt creation is going at a negative rate see Z1 report.

The system is collapsing.

Hansel's picture

Yeah, collapsing to infinity!  We're getting uber-rich!!!

G. Marx's picture


I like your spirit.

ReallySparky's picture

Off Topic : Thanks to the health care reform act, Insurance Premiums for my small business just increased 15.2%.  Is anybody else recieved any notice of rate increases?

Mako's picture

15% bad... I figured 30-50% right off the bat every year for the next 4 years... by year 5 all those insurance companies will be gone.

What till you see your State tax bill, your State better cancel the agreements.

JohnG's picture

Yes.  In today's mail.  27%. 

On top of 20% in December.

I can't afford that.  Had to lay off the end of the year (35 loyal employees), have most staff on 4 day weeks.  Everyone is afraid.

I don't know what to do, this may run me in.

Rainman's picture

The unintended consequence of ObamaScare.

Here comes four years of healthcare insurance gouging. It's the same scheme the credit card companies used with rates during their "window of opportunity" before new regs kicked in, only they had less time to do it.

Small business will have to.....a) lay off  b) shorten workweeks  c) eliminate employee healthcare d) impose more employee shared cost e) shut down.

More gasoline on the fire of Great Depression II, I'm afraid.

As usual, when you look to the government for a solution, you have already failed.

pbmatthews's picture

Its not a function of gouging its a function of all the government mandates on health insurance that went into effect immediately today have Barry's ink dried after signing the bill.


1.  By law, insurance policies can no longer limit the amount they pay out over the life of a policy.  Simple expected return math here requires insurance to price this additional payout risk resulting in higher premiums to you.

2.  By law all people now must be pay the same rate as the next person.  It doesn't matter if you work out in the gym 7 days a week, have 5% body fat, and can run a 6 minute mile.  You pay the same as the 600 lbs guy who can't get out his door that smokes 3 packs a day.  You also pay the same as the transvestite hooker that practices barebacking while sharing their heroin needle with the other junkies in the room. 

3. Are you a male without kids?  Not married?  Too bad.  Your policy now must also include maternity coverage and kids dental care (among other things) even though you will never use such services.

The government just usurped all the power of individuals to choose health insurance plans that meet their individual needs.  We now have one size fits all for everyone.

But we are now so much more free.

The fools that elected Barry Soetoro are getting what they deserved.

JR's picture

A Denninger Double Whammy:

That Didn’t Take Long…

From the forum:

"So I just got a call from my health insurance provider. My family rates are going up $200/month ... $2400/year per employee effective April 1st. Didn't take long after signing to get this s**t going.

So much for the "my plan will save Americans" $2500/year in Healthcare premiums.

F***ing liar in chief. "

Yes, this law will induce people to hire, it will improve health access, and it will be positive for the consumer, economy, stock market and spending.

The market rallies on for today, as I sit back and chuckle to myself...  "I told you so."

Please, buy more stocks to drive the DOW, S&P, Nasdaq and Russell higher on the mythical economic "recovery" and mythical job gains that will take hold as employers, right here and now, four full years before the "benefits" show up for adults in this bill (those very same workers) get whammied for $2,400 per year in additional costs per employee.

PS: One way or another the employees will be paying every single penny of that cost.  Either directly through lower wages (which will do great things for consumer spending and the economy) or indirectly as people are either laid off or not hired in the first place.


It’s Gonna Be Like Christmas (Health Care)

Oh boy are some folks in for a surprise.....

"It's just going to be like Christmas," said DeCarlo Flythe, who lost health coverage for his family when he was laid off almost three years ago. "It's going to be great. You know, no worries (about) the bills. We are going to go ahead and pay our co-pay and be alright."

You got the $10,000 for the policy and another $10k for the out-of-pocket deductibles, right?

Yes, I know if you are lower-income you'll get subsidies.  But that being laid off thing might become more-permanently laid off, you see, since if you go back to work your employer will have to either pay a fine (annually) or pick up the majority of that $10k in cost.

If your value in the marketplace is $20/hour, with a 2,000 hour man-year of work (50 weeks x 40 hours/week) your economic value in the economy is $40,000 (gross.)  From this your employer is going to have to take $10,000 out to avoid being fined, which means you now make $15/hour.  Then you pay taxes (FICA and Medicare) on that.  You'll likely get back the rest of your federal income tax (especially if you have a family) but your out-of-pocket medical expenses will still be that $10,000 either way.

So now you've got $30,000/year less about $2,300 in Medicare and FICA tax, and from that you subtract the co-pays and deductibles of $10,000.  You're left with about $18,000 to live on, or about $1,500 a month for your family of four.

This sounds like "Christmas"?

The clue-stick coming to whack these folks upside the head just as did the people who said "I don't have to worry about putting gas in my car or paying my mortgage!" will lead to some rather extreme emotions, I suspect, when the truth becomes apparent.

SV's picture

Nope - Signed our fixed renewal couple weeks ago for a full year (Read: I got my rates locked for now).  After that year, I expect the doors to blow off it... :P

Bigdaddydvo's picture

You guys need to chill out, man, deficits are the greatest.  At least that's what John Kenneth Galbraith JR thinks:

MarketTruth's picture

"It took 169 long years and seven major wars -- from 1776 to 1945 -- to rack up a cumulative deficit that matches the gaping budget hole of just 28 short days in February 2010." -- Marty Weiss

HungrySeagull's picture

Now I find that totally disgusting.

Can we not slow it down a little bit? Maybe even wait until after April 15 to pay for the needs of the USA after all the Tax reciepts are in?


Obama just signed away another hundreds of millions this week didnt he?


We are going the way the Romans once did, no one would want to carry the Government at any salary at this rate.

M.B. Drapier's picture

At March's run-rate of about $300 billion per month, the debt ceiling will be breached by October 2010.

Surely the US adminstration and the congressional Democrats will do Whatever It Takes to make sure that the next raising of the ceiling happens just after the mid-terms rather than just before them.

Brother Revegend Magoun's picture

It seems to be 5 bln a day including weekends!

TraderMark's picture



If you remember we purposely combined 2 increases into 1 so we would not have to vote on it twice ahead of (and closer to) the Nov 2010 election and piss off the people.  Therefore your October 2010 figure is null and void.  Whatever it takes we will make sure there will be no vote on the debt ceiling until AFTER the election because as we like to say in the halls "people are sheeple!"

Yours in Congressional Love,

The Crew in D.C.

Cyan Lite's picture

October 2010 is unacceptable.  December 2010 is perfectly fine.  If we get close to the ceiling in October, I guarantee you that the Fed will step in and do something to avoid a vote so close to November.

Rainman's picture

Agree. It will be another Christmas Eve Taxpayer the unlimited credit line boost to F/F on Xmas Eve '09.

......not a creature was stirring. Not even a mouse.

Astute Investor's picture

Next move by Treasury is to exchange all outstanding USTs for a like amount of PIK notes....VOILA, budget deficits disappear!

non-anon's picture

Just think if they put the GSE's on the "books" and other entitlements off book.

Enron and Lehman come to mind, we are totally screwed!

DrStrangelove's picture

I have thought of that, no official estimate but I would guess somewhere in the neighborhood of $250-350 trillion not including private debt oc.