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Treasury's Lew Brings Debt Deadline Forward, "Urges" Congress To Raise Debt Limit

Tyler Durden's picture




 

“The trend in our projected net resources has continued to be negative," warns Treasury Secretary Lew forcing the administration to move up the deadline for the end of extraordinary measures from Nov 5th to Nov 3rd

Ironically, Lew explains..

  • *LEW: OPERATING WITHOUT BORROWING AUTHORITY IS 'IRRESPONSIBLE'

But operating beyond your means (i.e. borrowing to be able to afford everything) is fine?

As Bloomberg reports,

Treasury Secretary Jacob J. Lew moved up by two days to Nov. 3 the deadline by which Congress must raise the nation’s debt limit.

 

The Treasury projections of the administration’s net resources have fallen $4 billion to $6 billion short of expectations, forcing the department to move up the date from Nov. 5, Lew said in a letter Thursday to House Speaker John Boehner. After the new deadline, the Treasury will have less than $30 billion to fund the government, “far short” of expenses on certain days, Lew said.

 

“The trend in our projected net resources has continued to be negative,” Lew said. "I respectfully urge Congress to take action as soon as possible, raise the debt limit without delay, and remove an unnecessary threat to our economy."

 

The Treasury is using extraordinary measures to stay under the borrowing limit. Government expenditures are as high as $60 billion depending on the day, he said.

*  *  *

From Lew's letter to Boehner

“Operating the United States government with no borrowing authority, and with only the cash on hand on a given day, would be profoundly irresponsible. As I wrote previously, we anticipate that a remaining cash balance of less than $30 billion would be depleted quickly,”

 

...

 

“We have learned from the past that failing to act until the last minute can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States,”

*  *  *

As Goldman previously noted,

Q: When will the debt limit be reached?

Probably in November. The Treasury estimates that the “extraordinary measures” it uses to increase borrowing capacity under the debt limit will not be exhausted before late October. As of the end of August, the Treasury appeared to have exhausted most of its bookkeeping strategies, with only about $60bn remaining (mainly the $23bn of the Exchange Stabilization Fund that is invested in Treasuries and $36bn related to the Civil Service Retirement and Disability Fund). However, it also has a substantial cash balance ($146bn as of September 18), which will provide an additional cushion once the Treasury exhausts its borrowing capacity. In the past, the Treasury has based the projected deadline for raising the debt limit that it announces to Congress assuming that the cash balance will not be allowed to go under $50bn, though on occasion it has allowed it to dip to $30bn preceding a debt limit increase.

 

And shutdowns create volatility mainly when they overlap with a debt limit deadline

 

Source: Goldman Sachs

 

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Thu, 10/15/2015 - 09:15 | 6670567 SandiaMan
SandiaMan's picture

Fuck Lew

Thu, 10/15/2015 - 09:18 | 6670583 VinceFostersGhost
VinceFostersGhost's picture

 

 

Someone should inform Lew that spending less money is indeed an option.

Thu, 10/15/2015 - 09:22 | 6670610 Haus-Targaryen
Haus-Targaryen's picture

I don't believe it at all.  They said this same shit last time.  The world kept turning.  We didn't resort to eating the old and the sick.  People still went to work and school.  Good God this is nothing but nonsense. 

Thu, 10/15/2015 - 09:45 | 6670772 Gilnut
Gilnut's picture

Agreed, but parasites tend to panic if they can't get their pound of flesh on time.

Thu, 10/15/2015 - 09:48 | 6670786 Pool Shark
Pool Shark's picture

 

 

Illinois has shown us the way:

 

IOU's all around!

 

Thu, 10/15/2015 - 09:53 | 6670806 BaBaBouy
BaBaBouy's picture

""Government expenditures are as high as $60 billion depending on the day""

Keynesian Fiats Credit Paper System Farce...

Thu, 10/15/2015 - 10:03 | 6670862 SumTing Wong
SumTing Wong's picture

Maybe they will sell some gold into the market, killing two birds with one stone. Or maybe they can sell a national park...they could probably get on one of those pawnbroker shows if they did so. It would show great fiscal responsibility, because we knoe only responsible people pawn stuff.

Thu, 10/15/2015 - 10:11 | 6670896 StackShinyStuff
StackShinyStuff's picture

Not this shit again

 

Thu, 10/15/2015 - 10:49 | 6671050 nink
nink's picture

Waiting for the debt clock to stop again http://www.usdebtclock.org/

 

Remember when they had to add the extra digit.  That was just 7 years ago doubled the debt in just 7 years

Thu, 10/15/2015 - 09:46 | 6670773 SWRichmond
SWRichmond's picture

Like they give a fuck about how much money is in their "accounts"?  Kabuki.  "Look, we're responsible stewards, we won't spend money we don't have".

Thu, 10/15/2015 - 09:23 | 6670616 TeamDepends
TeamDepends's picture

Of course it isn't! We need debt to soar MOAR!!!

Thu, 10/15/2015 - 09:34 | 6670696 Groundhog Day
Groundhog Day's picture

just raise it to 50 trillion so we don't have to deal with this for a few years.  Assholes are gonna raise it no matter  what so stop pretending to give a shit

Thu, 10/15/2015 - 09:37 | 6670714 Oldwood
Oldwood's picture

Record revenues just ain't enough. Hillary says make the rich people pay for it. Does she know where to send the check?

Thu, 10/15/2015 - 09:19 | 6670587 Looney
Looney's picture

The Illinois “IOU” experiment is about to be rolled-out nationwide. ;-)

Looney

Thu, 10/15/2015 - 09:21 | 6670599 Max Damage
Max Damage's picture

Just fuckin get rid of it and print to oblivion. Knobs

Thu, 10/15/2015 - 09:39 | 6670725 Eireann go Brach
Eireann go Brach's picture

Lew, you are a fucking Garden Gnome!

Thu, 10/15/2015 - 09:54 | 6670813 DavidC
DavidC's picture

Jack Lew - the invisible man.

DavidC

Thu, 10/15/2015 - 10:30 | 6670993 LooseLee
LooseLee's picture

Fuck Boehner

Thu, 10/15/2015 - 09:21 | 6670606 CHoward
CHoward's picture

This isn't a problem.  Congress will get on this right away - if our government knows how to do anything - the one thing they know how to do is spend our money. 

Thu, 10/15/2015 - 09:22 | 6670611 venturen
venturen's picture

why don't they take back the $4 Trillion the FED printed from the criminals banks...that will keep them running!

Thu, 10/15/2015 - 11:04 | 6671101 Slowdrip
Slowdrip's picture

Read somewhere it was more like 16 to 20 plus trillion the FED put out in 2007/08, worldwide....

Thu, 10/15/2015 - 09:23 | 6670613 gcjohns1971
gcjohns1971's picture

So long as we have a debt based currency, where $1 of gov't debt = $1 currency issuance, the debt growth is impossible to control BY DESIGN.  Each auction must retire the old debt plus interest, meaning the new debt must always be larger than the old debt so there is enough currency to retire the old debt plus interest.

For that reason, the deb ceiling is theater.  MEANINGLESS THEATER.

The day they created the Federal Reserve the Congress lost the authority to decide HOW LITTLE to spend.  The minimum spending to keep the monetary system afloat is not discretionary.  

Congress only gets to decide HOW MUCH ADDITIONAL to spend, and whom to spend it on.

 

Since 2008 the government's compound debt growth went parabolic.

Congress only choice is to spend the new money... or to design a new monetary system.

 

PERIOD.

Thu, 10/15/2015 - 09:26 | 6670636 LawsofPhysics
LawsofPhysics's picture

Yes.  So, it is indeed time to end the Fed, prosecute all Federal reserve board members since 1971, and hold a new constitutional congress.  Most of the debt is in fact fraudulent in the first place as it was added without the consent of the people.  just like Obama/Bush are ording our military to go into battle without the consent of congress!!!!!!!!

Bullshit!  Time to take some fucking heads!!!

Thu, 10/15/2015 - 09:42 | 6670754 BiPolarFrenchman
BiPolarFrenchman's picture

How do you get the average broke and lazy American to organize, especially with the security-media complex working full-time against you?  That's the question

Thu, 10/15/2015 - 10:57 | 6671078 LawsofPhysics
LawsofPhysics's picture

I see it happening already.  Lots of "under the table" deals happening already.  The supply lines will break at some point.  Producers of real goods and serivess simply will not be able to deliver.  At that point what happens in D.C. will become fucking irrelevant.

We are in fact going to experience the very same outcome experienced by the people of the Soviet Union in the late 80's and early 90's. 

This is just simple math at this point as the liabilities are what they are.

Hedge accordingly.

Thu, 10/15/2015 - 09:30 | 6670664 Usurious
Usurious's picture

 

 

'Congress only choice is to spend the new money... or to design a new monetary system'.............BINGO.......

growth of the debt is required, not optional...........trav7777 

 

trav7777

''Fractional reserve lets bankers EARN INTEREST on capital they DO NOT EVEN POSSESS.  This is why banking is inequitable and a societal EVIL.  Bankers and banking should be banned as contrary to public policy.  Let banking become lend your REAL capital, fine.  But every single financial panic, bubble, collapse, all of it, is traceable directly to the feet of bankers who committed fraud.''

http://www.zerohedge.com/article/antal-fekete-why-gold-standard-must-be-rehabilitated#comment-629768

Thu, 10/15/2015 - 09:36 | 6670705 gcjohns1971
gcjohns1971's picture

P.S.   They could revalue a physical asset they supposedly hold to a higher value, then wipe out the old currency and debts at once.   But this might result in Global Thermonuclear war...because every major nations' holdings are not in the same proportion to their debts...and hence there will be VIOLENT disagreement on what the level should be.  

ALTERNATIVELY...it all might be leased out into the market and not due for 'return' for years or decades.

AND PROBABLY...both.

Realistically they ought to do it anyway, and then declare different percentages of backing. 

Whatever the revaluation number...IT WILL BE ASTRONOMICAL COMPARED TO CURRENT PRICES WHEN THEY DO IT ... EVENTUALLY (years? a decade?...long time?)

 

P.P.S  Because they can't agree on how to do the only thing that they can do... QE4 NO LATER THAN APRIL 2016.

Thu, 10/15/2015 - 09:22 | 6670614 LawsofPhysics
LawsofPhysics's picture

Why do we need to raise the debt ceiling?  Every democrat I speak with tells me that under Obama the government has been collecting more in taxes then it has been spending?

 

Thu, 10/15/2015 - 09:26 | 6670635 Arnold
Arnold's picture

Lemme check with all the resources I have..........

 

 

http://www.usdebtclock.org/

 

Still broke.

 

 

Thu, 10/15/2015 - 09:26 | 6670638 Seasmoke
Seasmoke's picture

Lew isn't worried he can always move to Israel if things don't work out so well here. 

Thu, 10/15/2015 - 09:26 | 6670643 buzzsaw99
buzzsaw99's picture

"I respectfully urge Congress to take action as soon as possible, raise the debt limit without delay, and remove an unnecessary threat to our economy."

"our economy" :roll: I disrespectfully urge Lew to go fuck himself.

Thu, 10/15/2015 - 09:28 | 6670653 bnbdnb
bnbdnb's picture

1. Create debt.

2. Sell debt. 

3. Create stocks.

5. Sell stocks.

6. Go to step 1.

Thu, 10/15/2015 - 09:41 | 6670742 Oldwood
Oldwood's picture

loan people the money to buy stocks

buy stocks back when debt fueled bubble pops while still holding the note on the wiped out stocks

Thu, 10/15/2015 - 09:28 | 6670655 silverer
silverer's picture

"As of the end of August, the Treasury appeared to have exhausted most of its bookkeeping strategies".  Now that gives you a warm, confident and comfortable feeling right off the bat, doesn't it?

Thu, 10/15/2015 - 09:30 | 6670661 Collapsed_Elast...
Collapsed_Elastic_Pants's picture

The debt ceiling has been raised 74 times since March 1962. 

Obviously it must always be raised at some point.

Creating less currency, i.e, reducing debt, is NOT an option.

Thu, 10/15/2015 - 09:36 | 6670704 LawsofPhysics
LawsofPhysics's picture

Yes, but creating currancy that is equitable for all Americans (who are paying for it whether they like it or not) is another issuse.

 

In the current monetary system bankers/financiers face no RISK and do no real WORK, they are in fact nothing but useless over compensated paper-pushers between the computer/printer (where that debt is created in an instant WITHOUT any real collateral) and the producer/consumer in the real economy.

Time to execute the fucking middleman already!!!!

Thu, 10/15/2015 - 09:47 | 6670777 Collapsed_Elast...
Collapsed_Elastic_Pants's picture

"Time to execute the fucking middleman already!!!!"

So when do you think this will happen?

Thu, 10/15/2015 - 10:58 | 6671086 LawsofPhysics
LawsofPhysics's picture

When people are forced to barter and faith is lost.  personally I see at lot more "under the table" and black market activity already.

Thu, 10/15/2015 - 11:21 | 6671176 Collapsed_Elast...
Collapsed_Elastic_Pants's picture

You would think so, but for the public, (U.S anyway,), things would have to get extremely painful for lost faith. If losing 1/2 of the value of their 401k's didn't do it, what will? The people suffering and in pain have gone so low, they've dropped out, or like you say, turned toward a black market, which has always been there. The comfort level in the states is still very high and the financial acumen very low. I personally don't see the will for change. If you try to have a discussion about these things you get called a negative crank. The American public is into any reality other than the one staring them in the face. 

We're on the fringe.

Thu, 10/15/2015 - 09:47 | 6670776 yogibear
yogibear's picture

Nothing a good old fashion currency crisis could fix.

Thu, 10/15/2015 - 09:32 | 6670678 Wild Bill Steamcock
Wild Bill Steamcock's picture

Raise the debt ceiling?  Why not just rip the fucker off and spend/debt all the way to the ionosphere?  Responsibility and accountablility? Screw it! To infinity and beyond!

Thu, 10/15/2015 - 09:39 | 6670723 gougeonit
gougeonit's picture

OH My God, The U.S. are eating their future kids!

Thu, 10/15/2015 - 09:40 | 6670736 Tinky
Tinky's picture

Screw you, Lew.

Thu, 10/15/2015 - 09:45 | 6670770 yogibear
yogibear's picture

Jack Jew is all for spending much more.

Thu, 10/15/2015 - 09:44 | 6670760 world_debt_slave
world_debt_slave's picture

just get rid of the ceiling and go to the moon

Thu, 10/15/2015 - 09:44 | 6670764 yogibear
yogibear's picture

Yeah, double it so Obama can go on a spending spree  right before the elections.

Someone has to pay for those 100s of thousands of refugees and future DNC voters that will be on welfare.

Knew this was going to happen.

Look for the deficit to pop above $20 trillion and keep going up quickly. Already at $18.4 Trillion.

Zimbabwe economics.

Thu, 10/15/2015 - 09:48 | 6670780 Temerity Trader
Temerity Trader's picture

The MIC gets more war in Afganistan...at what cost in lives and $? They don't care. Everything is fine in the USA, just raise the debt ceiling another TRILLION dollars. Hell, most Americans don't give f*** about war or debt.

New jobs in America…yes, Netflix, Facebook…make nothing, just help entertain the brain-dead masses. Google your f***ing life away. Spend all day on Amazon as a ‘Prime’ person, buying more useless crap as you watch all the retail stores close up around you. These companies produce nothing of value, most earn profits from advertisers. How much more shit can they sell to the fools? People’s houses are overflowing with crap they didn’t even need. They can’t fit either SUV in the garage because it’s jammed to the rafters with unused exercise equipment, blenders, T.V. sets, I-toys, and a pile of one-year old furniture from China that delaminated.

The morons are all in the markets because they are certain the Fed has their backsides even as the economy slows to a crawl. Lousy earnings, more QE. They are preparing everyone for negative rates by January after the Christmas sales bust and the closing up of a half-dozen retail big-box chains.

People have learned nothing, thanks to the Fed. And why should they? Homes are being bid up again in many cities, and in Silicon Valley the largest property bubble in history will soon pop. The bankers will again demand bailouts; only Trump will tell them to f*** off. China is going to collapse without the stupid Americans and their debt-driven purchases. Again, only Trump will force them to leave the U.S. and sell off the properties they acquired here. This will accelerate downward pricing pressure and enable new American buyers to again afford homes.

Europe will soon collapse under the weight of millions of unemployed, ignorant, but fun-loving, friendly immigrants, who only want to spread Sharia law to their new lands. They will “educate” the Europeans on the ways of the Koran, and France will soon look like Syria. I will laugh…as I watch the bombs fall.

Thu, 10/15/2015 - 09:56 | 6670826 Ban KKiller
Ban KKiller's picture

When you have underage goat fuckers like James Comey and James Clapper proving they are above the law what does it matter? 

“Operating the United States government with no borrowing authority, and with only the cash on hand on a given day, would be profoundly irresponsible." 

 

There is no law and order.  Well, just for the serfs. 

Thu, 10/15/2015 - 10:30 | 6670992 gcjohns1971
gcjohns1971's picture

The Fed issues $1 currency for every $1 government debt.   Many of these are 3-year bills.

So, the first year's interest is $.01...  And when received that $.01 is retired (it payed off a portion of its collateral).

And the second year's interest is $.01... and also the third.

At maturity date the amount needed to keep the bond from defaulting is $1.  But there is only $.97 of currency left to pay it with (and you can't really borrow from the issuance of other bonds, because they will be facing the same problem when they mature).

So the government issues a new 3-year bond for $1.03, which is enough to retire the old bond plus the accumulated interest already payed.  And the Fed issues $1.03 in currency for that purpose.  And the net effect is that Federal Spending and debt MUST increase by $.03, whether they want it to or not.

That is one reason why the 'Debt Limit' MUST MUST MUST always expand regardless of what Congress wants to spend on, but simply because that is the currency design Congress authorized in the Federal Reserve Act of 1913.

AND THERE IS ANOTHER REASON:

The Fed misunderstood what was happening in 2008.   They thought that a lot of people took out debt on mortgages and welched...which is true.  But it says nothing about why this was a fatal event for the monetary system.  It was fatal because default on those loans reduced the amount of currency in circulation by a more than 1-to-1 basis.  

The reason it happend is because the reiterative process of putting newly created money in the hands of politicians and bankers, who spend it on different things than the rest of us would, distorts the economy in such a way as to CONSUME rather than to PRODUCE economic growth.   Shortly, Politcians wanted sub-prime, and implied they would guarantee them, as a vote-buying scheme.  Bankers wanted the same thing...because if guaranteed these loans were pure profit, without risk, that they could then chop up and sell as securities.

BUT IN RESPONSE TO 2008 the Fed started buying the resultant securities, most particularly the ones that were in default.   Today they still own $1.7 TRILLION of those securities, which the borrowers will never repay.  Default on those securities will result in reducing the monetary base by MORE THAN $1.7 trillion (due to compound interest).   If allowed there would not be enough money in existence for other loans to be paid...which would start a chain reaction resulting in currency collapse.

So, those Mortgage Backed securities will have to be replaced by Treasuries.  One way.  Or another.

And that means the Congress has to spend more.  One way.  Or another.

 

The only alternative is to:

A)  Let the currency collapse

B)  Revalue some existing asset they have, which has no counter-party, upward to fill the monetary gap, and then reset the currency system.

Thu, 10/15/2015 - 10:45 | 6671038 Collapsed_Elast...
Collapsed_Elastic_Pants's picture

First, I want muh helicopter money, and it damn sure better be more than the $1200 Bush gave me. 

Thu, 10/15/2015 - 10:50 | 6671052 falga
falga's picture

Who care Mr. Lew, just print more cash without congressional authority... This way, you might actually start some needed inflation!

Thu, 10/15/2015 - 11:27 | 6671206 fowlerja
fowlerja's picture

Damn ... Lew are you trying to screw up the World Series festivities and football season? ....Shame on you...can't you keep the ship going for a few more weeks....what's that Mr. Lew...the ship's name is Titantic...shit..man the lifeboats..I will just record the games on DVD and get back to them latter..

Thu, 10/15/2015 - 12:16 | 6671418 Eahudimac
Eahudimac's picture

Get to work Mr. Lew and mint that trillion dollar coin. 

Thu, 10/15/2015 - 12:18 | 6671432 theyjustcantstop
theyjustcantstop's picture

the sooner everyone realizes the federal budget is just what it sounds like.

it's the feds. political slush fund, to keep the sheep herded up.

where does the fed, budget,"slush fund" go, entitlements, and fed. salaries, and agencies, all major citizen control,"herding" systems.

what does the treasury have on it's balance sheet, 4-5 $trillion, is that tax-payer money, or international bankers money?

if lew can tell you under oath that it's tax-payer money, use it, cut the budget 20%, declare a no tax holiday for 2yrs.

then make Americaicans tax- payers tbtf's cover the treasuries sell-off.

it will be a different america in 2 yrs.

 

Thu, 10/15/2015 - 14:17 | 6671917 fowlerja
fowlerja's picture

Lew...this is the first time I have ever written you in public...I have dirty little secret..I am a federal gov't employee...and I am scared..yea..got my job via Obamee and I work with the Dept of Defense..presently working on a manual entitled..Government Entitlements..How To Ensure Proper Accountability If An Asteroid Hits the USA...Not critical..but I think you would agree that it is important..anyway understand the USA is running short of funds...now my other dirty secret...My family and I live paycheck to paycheck..so I cannot afford to not be paid... so Lew my problem is that without my paycheck there will be no Thanksgiving meal or Christmas presents at my household...God..what will my wife and kids think...Lew..want you to know that Janet is doing her part to keep the holiday spirit alive...Lew...do your part ...think of the kids all across this country who will go to bed on the 24th and have a toyless Christmas...do you want that on your conscience? I didn't think so...now let's get moving and make this country great again...please do your part in getting some more bonds printed...hint...can you get me a little more interest on those suckers..I could really use the income...make you a deal...you get me a good interest rate and I will spend it to do my part to make this country great again..thanks for taking the time to hear me out...and may you and your family have a joyous holiday season...

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