http://econimica.blogspot.com/2015/08/fed-never-intended-to-raise-rates-or.html
Need to put a couple pieces together here to give a full picture...
1- US federal debt reported by
the Treasury has not officially increased for over 150 days...it has
been locked at $18T,151B. This is being done as congress has not
authorized a new legal debt ceiling limit. In these "extraordinary"
times, the secretary of the Treasury borrows from federal pensions and
other available "trust funds" to avoid issuing new debt for the ongoing
deficit spending (on track for about $600B this year). This avoids
breaching the debt ceiling. Mr. Lew has stated he can do this until Oct
30 at which time all available funds will be depleted and a debt
ceiling hike will be necessary to enable ongoing deficit spending. Lets
assume the ceiling is raised by Oct 30 and treasury debt is again sold
to the "public". The Treasury will need to sell the $300 to $400
billion to pay back the borrowed funds plus the new debt.
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