US Ends 2016 With $19.98 Trillion In Federal Debt; Up $1,054,647,941,626.91

Tyler Durden's picture

On the last day of calendar 2016, total US public debt jumped by $98 billion, mostly as a result of end of quarter Social Security debt allocation, which accounted for $70.4 billion of the daily increase. As a result, total US government debt on December 30, 2016 was $19,976,826,951,047.80.

This compares to $18,922,179,009,420.89 on the last day of 2015 and means that the increase in US federal debt in 2016 was just over $1 trillion, or $1,054,647,941,626.91 to be specific.

Putting this increase in context, during Barack Obama’s time in office, federal debt has increased by $9,349,949,902,134.72, or 88%, rising from $10,626,877,048,913.08 on Jan. 20, 2009, the day of Obama’s inauguration to $19,976,826,951,047.80 on the last day of 2016.

That equals $78,553.84 for each of the 119,026,000 households in the country as of September.

Our condolences to anyone who doubted that Obama would be able to hit $20 trillion in Federal debt before leaving the White House.

* * *

For a somewhat amusing take on this disturbing statistics, here is Simon Black with: "US national debt soars by $100 billion. . . in just 8 hours"

According to the latest statement issued yesterday afternoon by the Department of Treasury, the US national debt has reached $19,976,826,951,047.80.

That’s $19.976 trillion, as of the close of business on Friday December 30, 2016.

(The government is typically a day or two behind when it sends out these reports.)

balance

That number itself is obviously remarkable, just shy of $20 trillion.

But what’s even more astounding is that, according to the Treasury Department’s own figures, they STARTED the day with a debt level of ‘just’ $19.879 trillion.

So literally in the span of a single 8-hour workday, the US government amassed an astonishing $97 billion in debt.

That’s simply incredible– $97 billion is larger than the entire GDP of New Mexico or Luxembourg. In 8 hours.

I review these reports every single day. Needless to say, an increase of this magnitude occurs… almost never.

And when I saw it yesterday afternoon, the “Holy Shit!” that came out of my mouth caused a rush of staff into my office asking “What happened?!?”

As I recovered from my shock, I explained that the US federal government had increased its debt by nearly $100 billion in a single day, to which one of them asked,

“What did they buy?”

I thought it a brilliant question, almost child-like in its simplicity. Indeed. What did they buy?

How many aircraft carriers did they purchase?

How many colonies on Mars did they build?

Did President $20,000,000,000,000BAMA acquire a controlling stake in the Walt Disney corporation on behalf of the taxpayers of the United States?

Did Congress suddenly recapitalize the FDIC, or any one of the half-dozen insolvent US trust funds?

Perhaps they fixed a decent portion of the nation’s crumbling infrastructure.

Or maybe they just decided to send a check for almost $1,000 to every household in America.

Nope. None of the above.

The reality is that these people indebted every single taxpayer, including future generations of taxpayers who won’t even be born for decades, with a massive bill that has almost no mathematical probability of ever being paid down.

And despite this prodigious debt, the government has absolutely nothing to show for it.

What’s really amazing is that this isn’t even unusual anymore.

The national debt in the United States is already much larger, and is growing much more quickly, than the US economy.

Plus, interest rates are rising from their historic lows.

In fiscal year 2016 (which ran from October 1, 2015 through September 30, 2016), the government’s total interest bill was $432,649,652,901.12.

This works out to be an average interest rate of 2.204%, according to the Treasury Department’s most recent data from November 2016.

But it wasn’t that long ago that interest rates were MUCH higher.

Back in January 2008, for example, the average interest rate on US government debt was 4.785%.

And even that was considered quite low by historical standards.

Today’s rates are less than half that level. And it’s reasonable to expect rates to increase. In fact, that’s already happening.

In late December, the Treasury Department sold $28 billion worth of 7-year Treasury notes at a yield of 2.24%.

2.24% is still pretty cheap. But it’s nearly double the rate from just six months ago.

Back in July, the 3-month T-bill rate was just 0.02%. Now it’s more than 25 TIMES greater at 0.51%.

This is a significant increase in a short period of time.

If the government’s average interest rate returned to 2007 levels, they would be spending nearly $1 trillion each year just to pay interest.

That’s more than they currently spend on Medicare or the US military.

So as you can see, the US government is not only increasing the debt level at an astonishing rate (with absolutely nothing to show for it), but they’re going to have to start paying a LOT more interest.

Remember that they already borrow money just to pay interest on the money they’ve already borrowed.

So higher interest rates mean that they’ll have to borrow even more money to pay interest, which will cause the debt to go up even higher, requiring them to borrow even more money to pay interest.

It’s a never-ending cycle that only ends one way: default.

The idea of ‘growing their way out’ of debt is a total fantasy.

The debt level is growing much faster than the economy, so each year the hole becomes even deeper.

They’ll either have to default on their creditors, causing a massive catastrophe across the global financial system…

… or they’ll have to default on the promises they’ve made to taxpayers.

You might be thinking– “Can’t they just cut government spending?”

No. Again, not without defaulting on taxpayers.

The three biggest line items in the budget that mop up almost ALL government spending are:

– Debt interest
– Social Security & Medicare
– Military

Everything else COMBINED is trivial by comparison.

So cutting spending quite literally requires a default on the promises they’ve made to taxpayers.

This includes everything from Social Security to maintaining a stable financial system without resorting to major inflation or capital controls.

None of this means there’s going to be some spectacular collapse tomorrow morning.

The sky is not falling.

In fact, despite this debt madness, we’re living in a world full of incredible business, investment, technological, and lifestyle opportunities.

It’s truly an incredible time to be alive.

But the rapid rise in interest rates coupled with an astonishing increase in the debt creates an obvious long-term trend with major consequences that anyone would be foolish to ignore.

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localstorm's picture

Good job, Barack

two hoots's picture

Obama's, not so secret reparation/redistribution program.  Taxpayersm the ones who are punished, don't feel the weight, yet, of fiat created debt but they wil. 

Tom Servo's picture

But Obama cut the deficit by half!!!!!!!!!!!11111oneoneoneone

 

BaBaBouy's picture

OF COURSE ~~~ USD Bullish ...

Print/Debt MORE ~ They Will Come...

BaBaBouy's picture

I Wish I Could Print GOLD Like they Print Dollars ~~~

JRobby's picture

Oblivio will push it over the goal line by the 20th with excellent blocking from the banking elite.

It would be nice to know where the party celebrating $20T will be?

(sounds of magazines locking into weapons)

Heavy's picture

It's like having termites really badly, the only real option is to move... or burn it to the ground...

Il Dottore's picture
Il Dottore (not verified) Heavy Jan 4, 2017 1:23 PM

First days of Trump in office new numbers will appear, and will overpass the 20 trillions

Mountainview's picture

Add to this all the commitments and engagements and you end up at $200 trn and you throw the book in the oven.

Hal n back's picture

actually he says he cut dficits by 2/3--or was that Hillary saying that as an accomplishment?

 Meanwhile he cut the deficit by cutting out defense and infrastructure spending-bothare  timing issues to give the optics that all was good.

 

Its all about optics.

and US bankruptcy.

wildbad's picture

..missed by THAT much.

M. Smart

AlaricBalth's picture

That is an 11.057783% annualized growth rate for 8 years. I'll take that anytime in this interest rate environment....

Oh wait.....

Manthong's picture

Heckuva job brownie

 

NoVa's picture

he & his peeps still have 16 more days to further ruin this country.

 

NoVa

Déjà view's picture

DOJ has kept rating agencies in line...

Delving Eye's picture

The debt will hit 20 before the DOW does.

PT's picture

I thought Obama entered when the US had $8Trill of debt.  What year did the debt hit $8 Trill?

RockRiver's picture

Is that all?

 

 

/sarc

 

PT's picture

Only the little people have to worry about repaying their debts.  The big people "restructure" their debts.  Or something.  Becoz that is why they are richer than you.

Offthebeach's picture

House Boy no make budget. CON-gress does.

Financial Industrial Complex
Medical Industrial Complex
Military Industrial Complex.

Or F.M.M.I.C. ( Pronounced "fim-mic")

USA!FUK'N A!

SteveNYC's picture

Looking forward to tax season, doing my part for the collective......

/s

FiatFapper's picture

Why do sovereign countries borrow their own money from private central banks? Why not just print your own money with no interest?

 

Bradbury pound

On the 7th August 1914, in order to avoid a run on the banks, the Treasury issued Treasury Notes signed by John Bradbury - a form of national credit backed by the credit of the nation.

link

RedBaron616's picture

Yes, there is no Congress to pass budgets, just Presidents. How nicely you let them off the hook, just as they hoped you would.

Mikeyy's picture

No worries, Trump'll fix it

LawsofPhysics's picture

You think that is impressive, just wait...

I understand math, you ain't seen nothing yet!!!

synarch's picture

Makes me feel a little better about my use of credit cards...then again I'm on the hook, Obama is just holding his pole.

chunga's picture

98 billion in one fucking day is incredible. Orlov makes the case, fairly well, that about the only thing left for Unkle Skam to pilfer...is our good friends...Saudi Arabia.

How to Make America Great Again with Other People’s Money

http://cluborlov.com/

Cautiously Pessimistic's picture

WINNING !!!!!

 

And.... Barack & Michelle Obama throwing themselves a 'good-bye' party at the White House.  These GRIFTERS just have to get in one more party on the back of the taxpayer.  How pathetic.....

http://dailycaller.com/2017/01/04/barack-obama-is-throwing-himself-a-goo...

 

Totally_Disillusioned's picture

Judicial Watch through FOIA found $96Million spent on Obummer's personal travel/parties. How much more did the taxpayer get bilked for in security, AirForce 1&2, staff expenses and other hidden costs?

RedBaron616's picture

And you Trump is going to do any less?  Commuting from the Trump Tower to the White House?  I expect you to complain with the Donald flies all over the place too!

Mass_hysteria's picture
Mass_hysteria (not verified) Jan 4, 2017 11:06 AM

And America has ~$100 trillion in future promises. How is it going to keep those promises? Really feel for the older generations, they've been so hoaxed about thise false illusion called America, home of the brave land of the "free". You are not free my friends, you are enslaved, worse than ever before.

 

 

OverTheHedge's picture

The older generations will suffer, but the younger generations will be the ones really paying the bill, whether they want to or not. Remember that the boomers outnumber everyone, and will vote accordingly. I would hate to be young in the US, or anywhere in the western world for that matter.

 

Cruel Joke's picture

Barak: Meeh, but the holidays were great. Make no mistake ...Red line ... etcetera.

Muad'Grumps's picture

The reason we see these big one day jumps is that the Treasury is trying to extend the belly of the maturity profile. Too much is frontloaded at the short end. So what it does is burn thru cash for awhile as short term paper matures instead of rolling it over. When an auction for a 10Y or 30Y comes up then we see the big increase in debt.

spanish inquisition's picture

Guessing that is why the DOW cant hit 20,000.

NugginFuts's picture

Someone explain to me why we don't have "DEBT $20T" hats to go along with our "Dow 20K" hats.... seems this is a FAR greater accomplishment!

small axe's picture

Not too late to cut the deficit in half like you promised in 2008, Mr Oba. You still have over two weeks!

Stanley Lord's picture

and fuck the GOP for letting it happen.

Never trust POS RYAN or McConnell again.

Offthebeach's picture

What?

Trust? Really, Willis?

The WWF is more straight up honest.

Snípéir_Ag_Obair's picture

Krugman will decry the opportunity cost of such debt as soon as Trump gets in, and blame him for it too.

This is never ever being paid back - why are we pretending otherwise?

Ghordius's picture

two things in the article that make me go "eh?"

"You might be thinking– “Can’t they just cut government spending?”

No. Again, not without defaulting on taxpayers."

what does the author mean, here? because here is the argument:

"The three biggest line items in the budget that mop up almost ALL government spending are:

– Debt interest
– Social Security & Medicare
– Military

Everything else COMBINED is trivial by comparison."

yes. now debt interest and social security/medicare is one thing

but the other is Military Expenses

whereas the US spends as much as the whole rest of the world combined

do you know how much Russia spends for it's military? do you know how much more the US spends?

guess: A) 2:1; B) 5:1; C) 10:1

Snout the First's picture

And just how much do Russia and China pay their soldiers each month compared to what we pay our soldiers? You don't suppose that's where much of the difference originates?

 

I am continually amazed at how people delight in lambasting our military, when it is the only social engineering program our government has ever enacted that has worked. Take several hundred thousand kids out of high school every year, expose them to others from different ethnic groups and from different parts of the country, teach them a trade, self-respect and self-reliance. But by all means, defend to your dying breath all of the civilian social programs that only piss away money and make things worse, while damning the military. 

amadeus39's picture

Yeah I agree that it is in many ways beneficial to society, but just leave out the war part OK? Benefits drop significantly when war activity is included. Perhaps activities such as road building, school building, and hospital building would be better. Maybe just building things instead of destroying things would improve the military's image.

 

 

Dominus Ludificatio's picture

US military complex is the no 1 bloodsucker,in financial and human  terms .

Skiprrrdog's picture

The reality is that these people indebted every single taxpayer, including future generations of taxpayers who won’t even be born for decades, with a massive bill that has almost no mathematical probability of ever being paid down.

Sorry, but I did not vote for the moron, either time. This debt is a snowflake (or whoever voted for him) problem, not mine.Y'all take it up with the faggot Kenyan limo driver... I am *sure* he has it all worked out...

directaction's picture

The crazed war maniac, Obama.
Has bounced ten trillion dollars worth of rubber checks in the past eight years. 
Imagine, if you will, what the USA would've been like had he refused to sign them,
And demanded a balanced budget instread.