US Adds $120 Billion In Debt Since Debt Ceiling Hike On Friday, $310 Billion More On Deck In Next Two Months

Tyler Durden's picture


Remember when the US hiked its debt ceiling on Friday courtesy of a formulaic 52 affirmative votes in the Senate, giving the Treasury $1.2 trillion in dry debt powder to attempt to grow the economy one more time according to the algorithmic fantasies of voodoo priests with pieces of Ivy League parchment on their walls? Well, two days later, the dry powder is less than $1.1 trillion. In other words, in the past two days, total US debt increased by $120 billion, along the lines of our expectations, as the Treasury filled up all the G-fund cash it had pillaged to continue issuing debt throughout the month of January even though it was formally above the debt ceiling. What is more concerning, is that as the chart below shows, the trendline of US debt since the beginning of 2011 is no longer a straight line, but has slowly transformed into a parabola, the very same word used as the root in such other infamous words as, for example, parabolic.

It gets worse: even according to the drastically, and very unrealistically, downward revised borrowing expectations of the Treasury released yesterday, the US will issue $444 billion in debt in this quarter. Today's number means that in February and March alone Tim Geithner will raise another $310 billion, which will send total debt to $15.7 trillion as of March 31. What is the final debt ceiling? Just under $16.4 trillion. So the US will have $700 billion in debt issuance capacity for the 7 months leading into the presidential election (and 9 until the end of the year).

Now naturally, if the debt ceiling becomes a sticking point at the election, Obama's chances of reelection plunge. Which makes us wonder - will Republicans grasp that the paradox of defeating Obama is precisely in giving him a carte blanche on all the stimulus programs he wants? Because if Congress approves another $200, 300 or even $400 billion in stimulus pork (the only thing better than one Solyndra? One thousand Solyndras!) the Treasury will drown in the need to raise hundreds of billions more, and will in fact hit the ceiling well in advance of the elections. As for the stimulus projects themselves, they will crash and burn just like all centrally planned endeavors, and actually results in a far worse outcome than if they had never been attempted. Because ironically, now that the entire world has passed the Rubicon, and unfortunately there really is no way of fixing anything, the only thing one can hope for is letting the status quo get on with doing what it does best, and leading the 100 year process of central planning to its sad and terminal conclusion, only after which can the "fresh start" reset occur. Ironically, the same thing is true with the farce that is the debt ceiling: the best way to finally get back to a fiscally prudent regime? Why go to town, of course.

And, we almost forgot to add, as of today, total debt to GDP is once again well over 100% even with the latest Q4 GDP data, at 100.4% and rising every day.

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 02/02/2012 - 00:26 | 2118951 DoChenRollingBearing
DoChenRollingBearing's picture

@ A Lunatic, psychopaths do.

Wed, 02/01/2012 - 20:30 | 2118398 vegas
vegas's picture

It isn't a question of IF Amerika defaults, it's only a question of WHEN. If Chalky Hussein Soetero gets reelected, I'm guessing sometime in 2013 nobody will loan Amerika any more money and this stinkhole becomes Greece in spades. If Romney, or some other Repub gets the nod, the markets will give them a chance to bring some sanity to the table. If the Repubs blow it, sometime in 2014 the gig is up as well. Gold $5k - fiat zero.


Wed, 02/01/2012 - 20:59 | 2118483 Fedophile
Fedophile's picture

Those who spam CTRL+P never default.

Wed, 02/01/2012 - 21:08 | 2118499 Harlequin001
Harlequin001's picture

You have until the first collapse. Then you have an economy and a currency that is already devalued and will be the target for every bond investor currently holding USD.

The US at that point will sink like a brick, as will every other fiat paper..

Personally I intend to retain my paper wealth and deal with the problem by not eating food again, ever.

There may be a flaw in my plan, but I don't see it...

Can I be a central banker now?

Thu, 02/02/2012 - 00:28 | 2118955 DoChenRollingBearing
DoChenRollingBearing's picture

Be your own Central Bank.  Buy gold.

Thu, 02/02/2012 - 02:14 | 2119130 Harlequin001
Harlequin001's picture

It's cheaper to stop eating...

Wed, 02/01/2012 - 21:17 | 2118536 AmCockerSpaniel
AmCockerSpaniel's picture

The Fed/ Bernanke will lend forever. So thats not the issue. It's the value of the USD.  Buy GOLD!

Wed, 02/01/2012 - 21:25 | 2118556 Sam Clemons
Sam Clemons's picture

We have already defaulted.  By definition, paying somebody back in something worth less than what they lent you is defaulting.  Ours is just a camouflaged version.

Wed, 02/01/2012 - 20:29 | 2118400 JPM Hater001
JPM Hater001's picture

You know what...I'm gonna start cheering it on.

You go debt ... Run. Run run run.
I love you debt. You make me richer every day and give my mom and dad so many things they depend on like food and healthcare and drugs...

I want drugs too. Can you help me with that too?

Wed, 02/01/2012 - 21:21 | 2118544 smiler03
smiler03's picture

You want drugs?


Wed, 02/01/2012 - 20:30 | 2118404 inkarri9
inkarri9's picture

And yet Timmay is considering issuing negative yield bonds?  I guess that was the logical next step - To get people to PAY the Treasury to steal from them.  

Wed, 02/01/2012 - 20:50 | 2118462 scatterbrains
scatterbrains's picture

A mobster would agree protection don't come cheap.

Wed, 02/01/2012 - 20:30 | 2118406 Atomizer
Atomizer's picture

Timmay is a well behaved monkey who entertains the masses to fill the organ grinders tin cup.

Wed, 02/01/2012 - 21:33 | 2118581 Timmay
Timmay's picture

Yes, yes I am....

Wed, 02/01/2012 - 20:32 | 2118412 navy62802
navy62802's picture

Holy. Fucking. Shit. O_O

Wed, 02/01/2012 - 20:50 | 2118460 centerline
centerline's picture

And the complete media blackout for the last few months continues. People simply clueless. Except that they have clearly given up on paying down any debt and are in a perpetual holding pattern - gratifying themselves with the latest "iProduct", eating out, etc. as if nothing is wrong... but nothing is better at the same time. Is a very odd point in time. Feels all wrong. I wager it is going to end badly and people are going to look back with horror regarding the warning signs they ignored.

Wed, 02/01/2012 - 21:10 | 2118506 navy62802
navy62802's picture

At this late stage, I almost think it's better for people to just get blind sided. Let them enjoy the last few moments in bliss before the storm of misery hits. Because there's no way this can be fixed without a catastrophic collapse and widespread misery.

It's also helpful for those of us who are attempting to prepare. Because the longer the panic is staved off, the longer we have to prepare. Once the panic has started, it's already too late to do anything to help yourself.

Wed, 02/01/2012 - 23:43 | 2118748 Clay Hill
Clay Hill's picture


Wed, 02/01/2012 - 21:26 | 2118560 BeerBrewer09
BeerBrewer09's picture

What exactly will happen to those holding personal debt (mortgage, car, student loan)? Would a few gold/silver coins pay off the loan institutions? What happens to those who aren't holding any PMs or collateral to pay off their loans?

Wed, 02/01/2012 - 22:23 | 2118695 UP Forester
UP Forester's picture

1.  You end up in a camp.

2.  You end up in a camp.

3.  You end up in a camp.

Thu, 02/02/2012 - 01:27 | 2119075 luna_man
luna_man's picture



Perhaps, you have the wrong idea about "PMS"!

Paying off debt?...R U CRAZY??

Thu, 02/02/2012 - 03:42 | 2119204 HungrySeagull
HungrySeagull's picture

A few coins will take care of all those annoying little slave debts.

Thu, 02/02/2012 - 01:29 | 2119077 non_anon
non_anon's picture

watch your fucking mouth o_0

Wed, 02/01/2012 - 20:33 | 2118414 adr
adr's picture

Take $100 billion in Fed money, buy every share of Facebook's IPO, borrow $500 billion more in Fed money to buy every share of Facebook again causing Facebook's valuation to skyrocket, sell shares to sucker in Chinese government for $15 trillion. BINGO DEBT PROBLEM SOLVED!!!!

Wed, 02/01/2012 - 20:35 | 2118418 longdong silver
longdong silver's picture

Relax, It's a drop in the really big fkn bucket.

Wed, 02/01/2012 - 20:35 | 2118419 HD
HD's picture

Well, I guess this will indeed be the most expensive presidential election ever.

Wed, 02/01/2012 - 20:38 | 2118424 azzhatter
azzhatter's picture

Costs a lot of money to buy votes

Wed, 02/01/2012 - 20:38 | 2118427 inkarri9
inkarri9's picture

But, but, but Newt GinGrinch said we need an American moon base...

Wed, 02/01/2012 - 20:57 | 2118476 blu
blu's picture

See that's a common misconception of his actual comments on the topic.

What he said was "America needs moon beads"

It's a mardi gras reference. The guy is totally into it.

Wed, 02/01/2012 - 21:11 | 2118518 Cheesy Bastard
Cheesy Bastard's picture

No, I think he was referring to the base of the American moon party.

Wed, 02/01/2012 - 23:06 | 2118790 saulysw
saulysw's picture

Now that's a party I could get behind!

Thu, 02/02/2012 - 00:31 | 2118963 exartizo
exartizo's picture

lol.. thanks for the laughs guys. 

I love ZH.

Thu, 02/02/2012 - 01:23 | 2119070 Vendetta
Vendetta's picture

his recent trips there made him say it.

Wed, 02/01/2012 - 20:40 | 2118434 zorba THE GREEK
zorba THE GREEK's picture

All that's left now, is for Canada and Mexico to start trading with each other in their own

currencies and avoiding the USD. That should push things over the edge and cause the Dollar to collapse.

To boost the value of the Dollar we could back it with the Greek Drachma. 

Wed, 02/01/2012 - 21:14 | 2118527 ChrisFromMorningside
ChrisFromMorningside's picture

When the Greek Drachma makes its long awaited re-debut, it will probably be on more solid footing than the USD ...

Wed, 02/01/2012 - 21:53 | 2118620 Global Hunter
Global Hunter's picture

The Canadian PM and party governing Parliament would have to have some big stones to do that.  Just because we can beat them at ice hockey...

Wed, 02/01/2012 - 20:51 | 2118458 Dr.Vannostrand
Dr.Vannostrand's picture

Winning The Future! When the debt ceiling is broken, we need to create a new one to break, so on and so on. We need to raise funds to battle the invaders from Planet X!

Paul Krugman (Crakerjack Prize recipient, Lt.Cmr. of the Broken Windows for a Brighter Future Brigade)

(sarc off)

Shits all fucked up and shit.

Wed, 02/01/2012 - 23:32 | 2118829 TruthInSunshine
TruthInSunshine's picture

I truly applaud your post, but want to point out a minor discrepancy is the closing slogan:

Wed, 02/01/2012 - 23:40 | 2118849 wisefool
wisefool's picture

you made me spit immitation burrito coverings on my monitor.

Thu, 02/02/2012 - 01:37 | 2119089 WonderDawg
WonderDawg's picture

I pissed myself.

Wed, 02/01/2012 - 20:50 | 2118461 q99x2
q99x2's picture

'algorithmic fantasies of voodoo priests with pieces of Ivy League parchment on their walls'

It's a pleasure for my eyes to read and my ears to hair.

Yes ZH has been known to cause the growth of ear hair.

Wed, 02/01/2012 - 20:52 | 2118465 yogibear
yogibear's picture

Bernanke and the Fed can just keep buying all those unsold treauries. A good case  for countries to move to another reserve currency. Obama, the congress and senate, Bernanke and the Federal Reserve are all abusing the privilage of having the US as a reserve currency.

The credit rating agencies should be downgrading US debt.

Wed, 02/01/2012 - 23:33 | 2118833 Matt
Matt's picture

1. QE $1 trillion more

2. Buy all the available gold in the world

3. ???

4. Profit!

Wed, 02/01/2012 - 20:53 | 2118466 lolmao500
lolmao500's picture

Debt for fiscal year starting October 1 2011 till January 31 2012 : 565.80 billion or 4.64 billion/day ($14.96/day/citizen) or ($1.692 trillion deficit)
Debt for calendar year 2012 till January 31 : 133.2 billion or 4.29 billion/day ($13.86/day/citizen) ($1.565 trillion deficit)
Current debt as of January 31 2012 : 15.356 trillion
Current debt ceiling : 14.694 trillion (first phase) 15.194 trillion (second phase) 16.694 trillion (final phase)

At the current average rate of 4.465 billion in new debt/day (or about $14.40 in new debt per day for every citizen in America...and that is just federal) it will take about 299 days before reaching the final phase of the debt ceiling hike, so around November 25, 2012.

US GDP : 15.294 trillion Q4 2011
US debt : 15.356 trillion

Total debt to GDP ratio : 100.40%

Wed, 02/01/2012 - 20:54 | 2118469 blu
blu's picture

Q: How can they spend another $1.2T and not move the economy into the black?

A: That's the amount of money needed just to backfill the crater the TBTF banks blew in the economy since 2008. To actually get back into the black you need a lot more than that.

Wed, 02/01/2012 - 21:09 | 2118513 ChrisFromMorningside
ChrisFromMorningside's picture

There's a lot of evidence that suggests that the U.S. economy is a net destroyer of wealth. In other words, without a transfer of (real) wealth to the U.S. from abroad (in return for the fake "wealth" of $ and T-notes), the U.S. economy would cannabilize itself and quickly be on the road towards self-destruction.

Picture a bucket with a hole in it. You turn on a water hose to try and fill it up. It doesn't work. You turn up the hose so that the rate of water coming into the bucket is greater than the rate of water coming out of the hole at the bottom. Ah, there you go, now the bucket at least LOOKS full, except you can't turn off the hose without it emptying again. That's the U.S. economy now. The hose can not be turned off.

Wed, 02/01/2012 - 21:46 | 2118606 CAUSE_EFFECT
CAUSE_EFFECT's picture  M. Franti/Spearhead may help here!

Wed, 02/01/2012 - 21:58 | 2118626 bbq on whitehou...
bbq on whitehouse lawn's picture

Placeing technology and power into the hands of fewer and fewer people; the right people.

Of course the tech will end up controling them rather then they controling it.

Wed, 02/01/2012 - 22:25 | 2118698 blindman
blindman's picture

this from the "stay away from the hot tub" news.
Credit Suisse one percenters David Higgs and Salman Siddiqui admit fraud in subprime mortgage scandal
Both men will cooperate in wider fed probe of subprime mess
Comments (8)
By Richard Schapiro / NEW YORK DAILY NEWS
Read more:
Hank Williams My Bucket's Got A Hole In It on 78

Wed, 02/01/2012 - 23:39 | 2118841 TruthInSunshine
TruthInSunshine's picture

ChrisfromMorningside - That's EXACTLY the case. Amerika (formerly America) is now a nation where the shape shifters (most accountants, most investment bankers, most attorneys, almost all goverment INC.) merely shift wealth from one sector to another, and these individuals and organizations produce nothing of net value.

There's a massive contrast between a nation that makes things of tangible value, that few other nations can produce, that are desired the world over, and can be exported and sold in exchange for real value in return (and a nation that is self-sufficient in full or part, as well) and a nation that has a massive segment of its workforce dedicating their efforts to merely shifting wealth from one area to another area, resulting in at best, a zero net gain, and often times, a highly destructive wealth affect and even a massive torching of capital.

Do NOT follow this link or you will be banned from the site!