The US Government Quietly Added $200 Billion To The National Debt This Month Alone

Tyler Durden's picture

Authored by Simon Black via SovereignMan.com,

There’s been something happening this month that very few people have noticed.

It’s been lost beneath all the other headline-dominating news, from the Las Vegas shooting to Harvey Weinstein to the Mueller investigation.

But very quietly behind the scenes there’s been an extremely rapid uptick in the US national debt.

In the month of October alone, the US national debt has soared by nearly a quarter of a trillion dollars.

This is pretty astonishing given that October is supposed to be a ‘good’ month for the US Treasury Department. The tax extension deadline means that October is usually quite strong for federal tax receipts.

And it has been– taxpayers have written checks totaling $190 billion to Uncle Sam so far this month.

Yet despite being flush with tax revenue, the US government still managed to pile almost a quarter of a trillion dollars more on top of its already enormous mountain of debt.

It’s always surprising to me how a story this monumental never receives any coverage.

The government of the largest, most important economy in the world is completely, woefully bankrupt. And its rate of decline is accelerating.

You’d think this would be on the front page of every major newspaper in the world.

But it’s not. It’s shrugged off as par for the course, as if accumulating historic levels of debt is somehow consequence-free.

And this complacency is what I find the MOST bizarre.

Consider the following: the US government spends nearly the ENTIRETY of its tax revenue on Social Security, Medicare, and Interest on the Debt.

Throw in national defense spending and the budget deficit is already hundreds of billions of dollars.

And that’s before they pay for anything else within the federal government: The Internal Revenue Service. National Parks. Highways. The guys who graze your genitals with the backs of their hands at the airport.

Congress could literally cut almost everything we think of as ‘government’ and they’d still lose hundreds of billions of dollars each year.

Oh, and raising taxes doesn’t solve this problem.

Over the past eight decades since the end of World War II, tax rates in the United States have been all over the board.

The highest marginal tax rate on individual income has been as high as 92% (in 1952-1953) and as low as 28% (1988-1990).

The corporate tax rate has gyrated between 53% and 34%. Capital gains rates have been as high as 35% and as low as 15%.

Yet throughout it all, overall tax revenue as a percentage of GDP has barely budged.

This is how governments measure tax revenue– as a percentage of the overall economy. It’s like measuring how big a slice of the economic pie ends up in the government’s pocket.

And that figure has barely budged for decades.

The US government’s tax revenue as a percentage of GDP is almost invariably around 17%, i.e. roughly 17% of all US economic value is paid to the federal government as tax revenue.

It doesn’t matter how high (or low) tax rates are set. Tax REVENUE stays the same.

So even if they jack up tax rates back to 90%, IT STILL DOESN’T SOLVE THE PROBLEM.

This is a cost problem; the government simply spends too much money on programs it cannot afford.

The only realistic way out is for the US government to eventually capitulate… and default.

This could mean selectively defaulting on holders of US debt (for example– the Chinese, Japanese, Federal Reserve, Social Security Trust Funds, etc.); one day Uncle Sam simply stops paying.

Or it could mean defaulting on promises made to citizens, like providing a strong national defense, maintaining a stable currency, or paying out Social Security benefits as advertised.

Each of these scenarios has its own particular consequences, ranging from steep inflation to a full-blown global financial crisis.

Bottom line, there is no rosy scenario here.

That’s not to say that any of this is going to happen tomorrow. Far from it. These consequences are years in the making.

But it’s imperative to start doing something about it now.

Social Security is a great example.

As we’ve discussed before, the program is already running out of money.

The Social Security Board of Trustees (which includes the US Treasury Secretary), estimates that its key trust funds will be depleted in 2034, at which point the program will be fully dependent on government tax revenue to pay monthly benefits.

Now, 2034 isn’t exactly around the corner.

But if this debt trajectory continues on its current path, by 2034 the US government will have to spend the bulk of its tax revenue paying interest.

With the Social Security Trust Fund depleted and government tax revenue consumed by interest payments, it’s hard to imagine anyone receiving their full benefits.

This isn’t a problem you want to wait 17 years to acknowledge.

If Social Security ever does dry up, you won’t be able to conjure a monthly pension out of thin air.

That’s why the time to start creating your Plan B is now: it takes time to build up retirement savings.

And even if some miracle were to occur– the national debt declines, Social Security is recapitalized, etc.– you won’t be worse off having an independent source of wealth that doesn’t depend on the government.

Do you have a Plan B?

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Throat-warbler Mangrove's picture

Onward, upward, go for broke ... Oh, wait.

Bes's picture

it's a good thing we aren't

investing more money into our bloated military

and not chasing a stock market bubble.

..........er

 

And it's a good thing we are

closing tax loopholes for oligarchs,

ending corporate welfare,

and ending the for profit oligopoly of health care

..........er

peopledontwanttruth's picture

Yeah and I went to this site since Donnie has been selected and thought there should not be any more postings since the eCONomy is booming

http://www.dailyjobcuts.com/

Stuck on Zero's picture

I know exactly why the government ran up $250B in debt ...  they decided to buy another F-35.

Endgame Napoleon's picture

So, SS and Medicare are the ONLY deficit culprits and, likewise, the only social programs that benefit most childless, single citizens in any way at any time. These are also the only social programs that citizens are forced to pay into on every dime they earn from often meager incomes.

We have a growing number of citizens who consume 100% free, noncontributory welfare and tax-welfare products: EBT food, free housing, monthly cash assistance and yearly child-tax-credit welfare between $3,237 (1 child) and $6,269 (3 or more kids that they cannot afford). So, they consume welfare all during their womb-productivity years and then consume SS all during their old age.

Moms work only 20 hours per week to get that assortment of free stuff, staying below the income limit for welfare, as do a ton of noncitizens who get the womb-productivity money and Medicaid without the SS. In retirement—just like during their working years—married SS recipients have far more income to cover expenses, like rent, because of their two checks.

If you are an employee making $19k—the per capita income in my state—you pay a little over 7.5% in SS tax on every penny earned.

If your gross income is $57k, while your net income is 19k, you pay a little over 15% in SS tax on every penny earned.

If your salaried income is 19k per month—meaning it is $228k per year—you pay a little over 7.5% in SS tax up to the $127,000 cap.

You can raise the SS cap, taxing the Aetna CEO who made $300 million in only one year on yearly income over $127,000.

Or, moms can stay home, rather than taking another job out of the economy when their spouses make plenty. They can take care of elderly relatives while taking care of their own children, as past generations did.

Ditto for the welfare/taxfare moms who can marry their children’s fathers, letting them support the family, or they can live with their elderly parents, taking care of them, rather than being set up in independent apartments by government to reward sex and reproduction out-of-wedlock, assuming they work the welfare-reform minimum of 20 hours per week, driving wages down for others by their willingness to accept rock-bottom pay.

It’ll be good for children, too. The current system of raising children by supporting working moms and working families with taxpayer funds has produced the largest rate of incarcerated adults in the history of a free country. The USA has 5% of the world’s population and 25% of its prisoners. The daycare workers are doing a lousy job raising the kids.

Mtnrunnr's picture

Trump is just finishing what Clinton started.

BennyBoy's picture

 

More debt=more money

It's a debt based money system!

Inherently unstable with that exponential debt creation thingee it needs to keep going which always, always, always blows up.

Give Me Some Truth's picture

$200 billion/month x 12 months = $2.4 trillion increase in debt.

The author is correct. No one cares; no one (who matters) will comment on this.

The MSM won't go here. It's like someone is giving them orders or something.

YUNOSELL's picture

They are investing in trying to locate the Lost City of Pon Z

Five Star's picture

All the budget deficits since WWII combined are less than the interest on the national debt since then 

http://thesoundingline.com/the-us-federal-debt-a-losing-proposition/

chiswickcat's picture

Over the last few years, there has been an average $1.2T budget deficit each year, $200bn a month is just average.

HRClinton's picture

For most Americans, plan B a zoo ka 

will have to do, if they expect DC slime to do right by them.

SeuMadruga's picture

The treasury'll start to issue its own crypto-bonds, which'll become usd substitutes on a 'bond'-chain. After all, why only the fed is allowed to discretionarily bloat its liabilities 10 fold within a couple of years ?!  ;-)

VWAndy's picture

 Fiat crackheads really. Its all about the paycheck.

alexcojones's picture

A Trillion here and a Trillion there, and pretty soon you're talking about REAL money.

Hat Tip: Everett Dirksen, circa 1960

"A billion here, a billion there, and pretty soon you're talking about real money."

curbjob's picture

So the treasury was a little light. Apparently they overestimated the taxes collected on NFL game tickets.

Maga

A82EBA's picture

Jim Willie said two yrs ago it was 200 b/ mo in hidden qe

Chupacabra-322's picture

@ AA82,

If you’re familiar with Catherine Austin Fits. It’s in the Trillions which get Criminally Stolen into Deep State Black Budgets.

Fitts sees a small, powerful group controlling the narrative and beating Neocon war drums as a way to save their failed experiment of a Global Corporate Technocracy that has run into popular resistance on the ground in the resounding populist backlash of Trump’s election in the US and the Brexit movement in the UK. Their plans for World War III and the massive military contracts that would come as a result are just part of one last desperate attempt to save the Central Banking Warfare Model that has served corporate and political elites for centuries

http://www.theeventchronicle.com/finanace/catherine-austin-fitts-black-b...

Anteater's picture

Trump v Rodham 2016 = ZioWarPig A v ZioWarPig B

Bmobing will recommence at 08:00.

That is all.

Anteater's picture

It's only 'QE' is you define 'QE' as absolute loss of control

at Pentagon, they were hacked of all employee data in 2012

then all contractor data in 2013, including myself, we were

all told 'get EquiFax' then EquiFax got hacked, and we had

to firewall everything with Pentagon and close out our bank.

There is MASSIVE BLEEDOUT that's why Pentagon burned

through their 2017 budget by midyear and Congress had

to emergency stop-gap their APs. Pentagon's Payroll and

Procurement has NO IDEA WHERE $100Bs are disappearing!

They have no audits (Panetta bugged out) and no stop-loss.

They could be losing $10 a day, or $10B a day. Likely $10B.

That ain't 'QE', that's 404, Death at America's Front Door.

HRClinton's picture

What a shame. It couldn't happen to nicer people.

:-)

two hoots's picture

Ryan and McConnell are somewhere out front in all of this spending.  It  can't just happen on its own. 

And if I remember correctly Trump said something like "for every dollar we save, we'll spend two" ....... it was some kind of twofer thing ?

MATA HAIRY's picture

how about cutting the fcking military instead of cutting social security to senior citizens who paid into it their entire career?

how about cutting the welfare to immigrants instead of cutting social security to senior citizens who paid into it their entire career?

how about taxing the fcking rich instead of cutting social security to senior citizens who paid into it their entire career?

Mtnrunnr's picture

Beca Old people don't produce for free like Immigrants, steal resources or generate nationalistic fervor like foreign wars or have all the money and power like the rich.

Snout the First's picture

I guess you missed that part of the article that stated that tax revenues are constant at 17% of GDP regardless of the tax rates.

Give Me Some Truth's picture

MATA Hairy, you are getting yourself all worked up for nothing. No one is going to CUT anything. Military, welfare or Social Security.

America, as it turns out, can print as much money as it needs to cover all of these obligations. Now and tomorrow. The "market" is not concerned at all.

You'll get your Social Security and we'll get our military gear and soldiers and pilots to fight all our many wars. Hurricane victims will get their Hurricane bailouts. Just calm down. Trust me. The printing press is functioning just fine. Better than ever really. Trump and Congress and the bankers and the Fed and the Treasury and the MSM are taking good care of that printing press.

Chupacabra-322's picture

Tyrannical Lawlessness.

Morally, spiritually, politically & economically

Bankrupted.

HRClinton's picture

Which is why they are front-running every other bankrupt fiat CB, by attracting Crypto money.

TheSilentMajority's picture

Nobody cares about debt anymore.

Just look at “safe haven” Japan as an example of how debt don't mean nuffin.

hotrod's picture

Yes sir,  World loves the Yen and Japan in massively bankrupt

Give Me Some Truth's picture

Like America, Japan is just fine. Not only can they print all the yen they need, they also can use it to make sure they buy every Japanese stock, weekly if needed, daily if needed. 

Buy stocks. Drink. Chill. Everything is okay. Nobody wants gold or silver. Everyone wants dollars and yen. Debt does not matter when you can create digits on a computer and transfer digits into whatever account requires digits. People are stressing out when really we are living in the best of times.

Say, next month, the debt goes up $400 billion. The month after that it goes up $600 billion.

1) We probably won't be told this.

2) Even if we are, it won't matter. 

It takes the same amount of keyboard pressure to create $600 billion in digits as it does $200 billion. We're good. Japan is good. Europe is good.

 

 

Silver Savior's picture

That's quite hilarious because I bought some more silver today and been selecting which gold coins I am going to buy with my bonus money this month. 

mosfet's picture

Japan is at the tail end of their deflationary phase and about to enter a final hyperinflation from which they'll never exit.  Noticed the recent big move up in Nikkei alongside a move down in Yen value - just like Venezuala in 2013?  Right now the money changers have rigged algos to sell Gold as Yen davalues.  Get ready for a potential sell-off in PMs down the road as the JPYUSD slide accelerates - at least until everything breaks when Japanese panic into PMs & crypto.

Hari_Seldon's picture

I had to upvote you for you avatar.

It's good to know you're not bipolar.

Anteater's picture

Come on, wake up! Congress had emergency session last April

when the deficit was already -$1.1T, and Pentagon had already

burned through their 2017 budget allotments by $54B! Congress

made emergency bailout to Pentagon, then buried the deficit, so

Trump's 1% Elites could attempt elimination of AMT, CG and ETs!

May, June, July, August, September, October, the deficit is now

$-2.0TRILLION!! PENTAGON IS BLEEDING OUT $100Bs. They

were successfully hacked in 2012 and 2013, this is public info.

Pentagon told all their employees and contractors 'Get EquiFax'.

Then EquiFax was hacked too! There is a MASSIVE BLEEDOUT!

Where Matt Tiabi? He's doing bio's of poor people now, after the

$B-class suckered him from RS, then dumped him like a rock.

THE WHOLE KJU FIRE AND FURY WAS A RUSE, just like 2008,

a ruse to force Congress to grift Pentagon another 10% bleed!!

We're going down! There is nowhere to bail out to! WINNING!!!

hotrod's picture

DONT SPOIL THE PARTY. Have a good time.

Deficit worries are for third world countries. The world still buys our Bonds right? 

They know we are good for it.

Walking Turtle's picture

Yeah...  Good for it, all right...

Even if they have to take payout HERE and haul it home themselves.  Or just stay on, and take it out in trade...  Oh wait wait the Chinese already own how much real estate already and Rosatom got a FINE hunk o' yellowcake too...  Yeah, we sure are good for it.

But who's this "WE", ANYway, Kemo Sabe?  Nobody *I* know started the fire. Oh yeh...  USDC Deplorables - generation upon generation of 'em!  Scorpions one and all...  Trust 'em to creep up 'n' lay the Sting into the Rest of Us, then scuttle off again. 

To Do It AGAIN.  Thousand-year canonical cycle per talmud iirc.  And that is all.  0{:-\o[

In.Sip.ient's picture

Nobody noticed?   Really?

Nobody cares?      Really?

 

Then kindly explain how BtC is hitting over US$ 6,000...  !!!

 

I'd say somebody noticed something...

 

Silver Savior's picture

But btc is even more of a joke than this is. People ain't noticing shit. They are all going to be short precious metal too because they waited too long to get it and btc was the distraction.

Deep Snorkeler's picture

The debt does not matter.

Americans fear only one thing-

the loss of entertainment.

(Also, maybe an interruption in food supply)

(Booze and drug supply too)

(Erratic porn service)

bunnyswanson's picture

They are called bonds for a reason.  BONDAGE.

Prices are not going up, USD is falling in value.

Top shelf produce leaves the USA for its favorite currency, the Yuan.

Go into any store and check out the inventory.  There is none. 

They are focused on one thing, determining who is trouble and how they should deal with them.  Smart Meters just may be designed to fill your house with gas and blow you and your whole family into heaven above.

Anti-Americanism is the issue and is global.  Obama accomplished his goals.  He is revered by all globalists as having accomplished his assignment. BANKRUPT the USA.

This is not news.  You americans have been warned over and fucking over and over by those who died shortly afterwards.

american men are so filled with self doubt, they have lost the ability to determine whether they are cornered. 

YOUR CHILDREN will pay dearly for your failure to understand what is basic survival technique.  KEEP YOUR HERO ALIVE AND MIND THE FUCKING STORE.

Anyone on stage now is in on it.  It's a movie.

Black Forest's picture

BTC and derivatives are going to solve all those troubles once and for all.

HRClinton's picture

No, BTC is going to dance and piss on the Derivatives grave.

AntiMatter's picture

This is yet another bs scare tactic article, "do you have aplan B" ?' subscribe to my blog, wire me your savings to protect from,..blah blah...etc.

bunnyswanson's picture

So many of you are on here dismissing the obvious, that the USA and her citizens are being overthrown through tactics required when there are armed militias on the ground.  BANKRUPTCY.

 

3 days without food and you'd suck the first dick that came your way for just one ice cream cone.

2 days without water and you'd sell your first born for a Nestle bottle filled with piss.

1 night without sleep and you'd be bent over taking it up the ass

 

Peak Finance's picture

LOLZ

I have gone 3 days without food and didn't suck a dick.

Did you ever think that maybe you are just a fucking queer?