US Federal Debt Is Expanding At The Fastest Rate Since The Crisis

Tyler Durden's picture

Submitted by Simon Black via,

A few days ago, the federal debt of the United States rather quietly and unceremoniously passed the $19.5 trillion mark.

And while that figure may seem absolutely confounding, what’s even more alarming is how rapidly the US government is racking up this debt.

In fact, for the 2016 fiscal year that ends in just ten more days, the US government’s debt growth of $1.36 trillion is on track to be the third biggest annual increase ever.

The only two years in all of US history that posted higher US debt growth were 2009 and 2010– the peak of the financial crisis.

Even more acutely, last month the US federal debt grew by $151.5 billion.

Not counting the financial crisis, and a few anomalous months following a debt ceiling reset, August 2016 was the single biggest expansion of US debt EVER.

In other words, US federal debt is expanding at its fastest rate since the financial crisis, and one of the fastest rates in all of US history.

This isn’t supposed to be happening. We’re in ‘peacetime’. The financial crisis is over. The economy is supposedly growing, and unemployment is supposedly falling.

None of the normal big deficit triggers exists; if you read the mainstream press, the news about the US economy is all rainbows and buttercups.

You’d think they would actually be running a surplus at this point and paying down the debt. Or at a minimum the rate of debt growth would be shrinking.

But no. Despite all of this good economic news, the government is still piling up debt at record levels.

If the debt is growing this quickly in good times, just imagine how dire the debt situation will become once the economy slows down and recession kicks in.

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stinkflipper's picture

So, we're fucked? Who knew?

Au_Ag_CuPbCu's picture

Odouchebag has done a wonderful job racking that up!  It's awesome, his legacy is ACA and more than doubling the national debt, all is just 8 years (that feels like a century).  WAY TO FUCKING GO!

cro_maat's picture

Why is this news? Especially on ZH

Late stage Ponzi. The FED needs lots of paper to monetize before the reset.

Must...  accelerate... before.... everyone..... stops.... believing..... - Quick trot out another FED talking head

Au_Ag_CuPbCu's picture

It's not news, but it still pisses me off.

knukles's picture

Sorta like Congress and the president giving themselves and their governmental operations unlimited EBT cards, no?

oops's picture
oops (not verified) knukles Sep 20, 2016 10:46 PM

Where's SHYLOCK when you need him?

Déjà view's picture

What do unborn have to say about this tremendous burdern..ones many 'show' CONCERN about...

neilhorn's picture

Fuck the unborn. Abort the alien.

NoDebt's picture

For those of you who doubted when I said "Don't worry about QE sucking all the liquidity out of the bond market.  They'll make more debt for the Fed to buy, I guarantee it", you can stop doubting now.  

We'll see more QE before we ever see a 1% Fed Funds rate.


knukles's picture

You and me, brother.

Just Dawned Upon Me.
A Financial Epiphany.
How quaint and even romantic a 1% funds rate sounds.

neilhorn's picture

Thank the guy on the radio in 1975 who told me to save for this. Now if only I can keep it.

Rainman's picture

And Barry Soertero and his Amex Platinum card still got exactly 4 months to go !

cowdiddly's picture

Corrupt democrats are gonna steal everything thats not tied down, probably go for the Whitehouse silverware again.

This is like having a divorce filed but your soon to be ex-wife has all the credit cards.

Consuelo's picture



I thought the Amex Ebony card was the top dawg, no...?

Clock Crasher's picture

If we cant expand the debt by 100% before 2025 we have resolution to the down side. We have been parabolic for at least a few years. Buckle up fellas.

mpnut's picture

NO need to END the FED... They will DO IT themselves.

maneco's picture

Perfect time to start a rate hiking cycle!!!!

Gulfcoastcommentary's picture

Maybe the economy is now, in fact, contracting now that deficit spending is increasing.  If so, we won't know for a good while.  Interestingly Chinese debt is growing exponentially too.  We're reaching the end of the road.

skohiu's picture

Chris Martenson spoke of this years ago. Max velocity of money supply needs to grow perpetually and exponentially.

skohiu's picture

We're scroomed

silverer's picture

Is that better or worse than "schlonged"?

Clock Crasher's picture

The GFC put a shallow dent in the hyperbolic chart
The GCC (global currency crisis) will put a 2nd shallow dent before turning up at escape velocity
GFC gold to sub 2,000
GCC gold to sub 20,000

place your bets

wisehiney's picture

I will give you a nickel's worth of growth for a billion dollars.

NoDebt's picture

Basically yeah, exactly that.

ajkreider's picture

This is public debt, but not debt held by the public.  The latter is $14 trillion, and $2.5 trillion of that is held at the Fed.  So, it's really more like $11.5 trillion.  But the Fed also has about $2 trillion in other financial assets, so it's really around $9.5 trillion, net.

Hohum's picture

Is your point that it's no big deal?

ajkreider's picture

Just trying to propery guage the scope of the problem.  But if accuracy isn't important, let's just say the debt is $10 quadrillion.  It would get some clicks.

hooligan2009's picture

you could argue that that it doesnt matter what the US borrows from itself and only the amount owed to external lenders is important.

you have TIC data that says its 6.2 trillion here:

apparently the irish have invested the odd 270 billion in US goverment bonds, to be the third largest lender - not bad for a country with only 4.5 million people - just goes to show that tax evasion is alive and kicking and located in dublin.

there is no data on moeny lent to us companies and individuals, but i would guess its about the same again, or perhaps something up to triple.

the size of the US government promises made to US citizens is the sum of net Government debt owed to US citizens (total government debt less money owed to foreigners) plus unfunded liabilities

from here:

unfunded liabilities are 104 trillion plus your figure of 11 trillion - so just the odd 115 trillion dollars on a GAAP basis.

the amount of money owed to foreigners will increase by the size of the trade deficit of 730 billion a year.

the problem will occur when overseas lenders want their money back maybe they won't ever want it back, that is the attitude taken by student loan orrowers.


ajkreider's picture

As the saying goes.  If I owe you a thousand dollars, I have a problem.  If I owe you a hundred trillion dollars, you have a problem.

quartshort's picture

In this case they will make it your problem.

School House Rock For the Win!

neilhorn's picture

If I had $10 quadrillion I could get some chicks.

neilhorn's picture

The fed holds your public debt. It is pledged by your government. The same government you voted for. Remember: "Govt of the people, by the people, for the people"? Good luck with your public debt. Maybe some public person will come along and pay it. If not, then your children can work it off.

Clock Crasher's picture

Globalization destroys demand. -Mac10 IDK


whats the point of expanding the balance sheets were in the face of this truth. If the top of the pyramid consumes most of the currency how is the base of the pyramid going to be able to afford to consume (aka demand)?

Throw in technological unemployment and higher minimum wage "to taste".

silverer's picture

We have a problem. Because future projections and charts and confirmed reports from the government chug out two years behind real time. So the Social Security projections are riding on 3.0 and 3.5% "expected" growth. Well, Obummer never hit 3% his whole presidency, so good luck with the projections. The GAO had said bust in eight years or so. Probably bust way sooner if the economy tanks hard. Maybe four or five years. After all, there is no trust fund. All paid out from current revenue. It's gonna be ugly, considering ZH just put up a story saying average Americans only have $2,500 saved for retirement.

jewish_master's picture

i see a massive fire sale of homes...

Clock Crasher's picture

Good point, .gov usually is good for 1,000% over orginal estimated bedgets/tagets and conversely with their success forecasting.  This is why you never go full retard.  In this case depegging the currency from gold. 


The Duke of New York A No.1's picture

Just wait till the self-proclaimed "King of Debt" has been in his throne for a couple years.

Hohum's picture

Keynes is rolling over in his grave.

Yen Cross's picture

  I was listening to some A-Hole on Fox business earlier bloviating about how '17 was going to be a good year, then putting out a GM buy recommendation.[ He must be expecting anther Bailout???]

  Apparently he hasn't seen the divergence in equity vs earnings, equity vs bonds, yield curve flattening, student debt, and subprime debt default ratios, and last but NOT least forward>guidance from major car manufacturers.

 That fucking clown needs to be put in a blender, on #3, with a few  Deer and Rabbit turds.

cro_maat's picture

Yen - I like the suggestion. If I put the result in my backyard for 9 months, I should have some nice compost for a vegetable garden.

Bill of Rights's picture

Funny how they call this PUBLIC DEBT not mine assholes

Chuckster's picture

I and a whole lot of other people think we are going into the economic abyss of all time right now.  Everyone seems to agree on that fact.  One (Raoul Pal) thinks everything down except the dollar.  The cleanest dirty shirt theory.  Money will float into the dollar in crisis pushing it's value up.  When Donald gave a speech a few months ago he said we can print our way out of it.  Was this a slip or does he think it's possible?  Donald's life history is he has learned to use credit.  Assuming we print the value of the dollar will go thru the floorboards but boy would we export goods and put people to work.  We tried the Great Society now maybe we will try the New Society.  Our national debt seems to be un-payable no matter what is done.  Debt jubilee?

Will Sept. 27 or Oct. 1 be the straw that broke the camel's back?  Oct. 1 could spell the end of the Petrodollar being the world currency.  I can't seem to find any valid reason why things should come apart on Sept.27 but a lot of people are saying it.  Michael Pento who don't seem to be an idiot says watch tomorrow Sept. 21 and you might get a shock.  Japan is going to announce whether they are going to put more QE into their system.  No candy for the markets and it may cause a market crash.  The FED is also going to announce whether they are going to raise rates.  A rate increase could cause devastation.

Any ideas Guys?



jewish_master's picture

the chinease are civilaized. they are waiting for the US to finish the election cycle. then they gona pull the plug on the dollar. americans will have to get used to lower standart of living

Clock Crasher's picture

Probably wasn't a good idea to  de-industrialize year over year for decades. 


If the government shrinks and there is a purge of leadership at both the corporate/government levels this country can be a major food/natural resource/energy exporter.  America has that going for her.  Detroit is going to be a major food producer if we survive this birth pang.  That might offset a lot of damage.  Best case scenario.  I for one am for 0% growth and continually improving on living standars incrimentally.  


Too optimistic?

Dark Daze's picture
Dark Daze (not verified) Clock Crasher Sep 20, 2016 7:50 PM

A 'major food exporter', when your primary crop, wheat, took a 50% hit on sales between 2014 and 2015, because your entire crop is GMO'ed? Corn too. And Canola in Canada. Russia has the right idea, 100% organic. The world will beat a path to their door.

The best thing that the Germans can do with Monsanto is to quietly bury it and admit that their Nazi inspired eugenics theory is a complete and utter bust, and the US is the fool for following it in the first place.

Seems that you produce more incompetent fools than anything else down there.

quartshort's picture

"Seems that you PROMOTE more incompetent fools than anything else down there."


Yen Cross's picture

  Buy some shiny stuff.

Dark Daze's picture
Dark Daze (not verified) Chuckster Sep 20, 2016 7:51 PM

When you print and there is no effect on lowering the dollar it is only because banks are putting massive derivatives forwards on to buy US dollars, on their books. That is the only way the thing works. Otherwise, you would have already had to abandon the greenback.