This little provision was slipped into the bailout bill (published on nytimes.com):
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
The last raise was only in July, to $10.6 trillion. Before that it was increased in September 2007 to $9.815 trillion. With the new limit, we have a 15% increase in 12 months, but that pales in comparison to the annualized rate of increase since July.
So those are the debt issuance figures: in the ballpark of $1 trillion extra for now, but surely to rise greatly as the panic deepens, tax receipts dry up, and a new New Deal is enacted. Not to mention any extra war expenditures, also no doubt on the way.
Note that these figures only refer to the sum of Treasury bonds outstanding, not the discounted future cost of entitlements, which adds another $90 trillion to the tab. It is a pretty safe bet that the US will never have a balanced budget again and default on its promises through failure to deliver services and inflating away its Treasury debt.
But before you go and put everything in gold juniors, remember that Japan ran massive deficits all through its lost decade of the 1990s, and they still experienced sustained deflation and had very low Treasury bond yields. The reason is that the debt issuance and public expenditures could not make up for the massive wealth lost in the aftermath of their real estate and stock bubble of the late 1980s. The Nikkei is still down 69% (and falling) from its high two decades ago.
I just read this and it appears that everything is going according to plan, no need to panic
http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm
Oh, yes. The printing presses are kicking into high gear. They will fight this deflation all the way and eventually win.
In the end, it is no trick to destroy a nation’s currency, since they all return to their intrinsic value: whatever recycled pulp is going for.
Why don’t they just raise the limit to infinity and save time?
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The problem really is that this money is all debt that the people are going to have to work off.
I found this video on YouTube which really opened my eyes to the importance of getting out of debt: http://www.youtube.com/watch?v=50bWUrKAbwU
i am sure you will be as amazed as I was.