U.S. Treasury Soon to Default: Déjà vu x 4 (Expanded)

From the Washington Post:

Congress last night approved legislation to increase the federal debt ceiling to $3.12 trillion, averting a threatened financial default by the government and clearing the way for swift consideration of separate legislation to overhaul the new "catastrophic" health insurance program.

Oops. Notice something odd about that debt ceiling of $3.12 trillion? That was the debt ceiling in late 1989, twenty years ago this coming November, when the Washington Post published the above passage. The current debt ceiling is about 4 times as much, $12.1 trillion.

Here's reality as of Friday, August 7, 2009, via the Wall Street Journal:

U.S. Treasury Secretary Timothy Geithner asked Congress to increase the $12.1 trillion debt limit on Friday, saying it is "critically important" that they act in the next two months.

It is "critically important" that Congress lift the debt limit in the next two months because that's about as much time we have until the U.S. goes into financial default, in other words, our country fails to meet our financial obligations.

The only way we, as a nation, can meet pay our bills is to borrow more money.

That's a handy fact to remember when politicians like Barack Obama and Arlen Specter swear that the gov't health care takeover won't thrust our country into more debt.

It's too late to make good on that promise.

An interesting footnote is that Geithner didn't ask for a new debt ceiling. To the Obama administration, the sky's the limit.

National Debt Clock

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Note: About that $3.12 trillion national debt ceiling of 1989, the total national debt accrued from the first day of George Washington's presidency through the first year George H.W. Bush's presidency: This year Congress voted to spend more than $3.5 trillion in just one year, next year.

Ichthyological curiosity of the day:

Goldie the Mint Fish,
Mascot of the U.S. Mint

By the way, here's a little graph showing recent trends in the U.S. monetary base, that is, the sum of our country's currency in circulation held by the public, financial institutions, and the Federal Reserve System. That rising line reflects various ways the government "prints money" to pay our nation's bills. Now that's fishy! (Click on the graph for a better view.)


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