In July, Congress and the Obama adminitration nearly brought the government to a shutdown over the issue of raising the debt ceiling. In the end, a compromise was achieved where the debt level would be raised over $2 trillion dollars, and the money was expected to supplement Federal spending until 2013.
Unfortunately, the government appears to have simply increased its spending when the debt ceiling bill was voted upon, and now President Obama may be seeking to raise it again, not in 2013, but just five months after the government received an additional $2 trillion in new debt.
U.S. TREASURY SAYS DEBT LIMIT TO BE RAISED BY $1.2 TRILLION
U.S. DEBT TO BE $100 BLN WITHIN LIMIT ON DEC. 30, TREASURY SAYS
STEPS FOR INCREASING DEBT LIMIT UNDER 2011 BUDGET CONTROL ACT
And the piece de resistance that 100% debt to GDP brings:
OBAMA ON DEC. 30 LIKELY TO ASK CONGRESS TO RAISE DEBT LIMIT – Zerohedge
Since August when the National Debt surpassed our annual GDP, and Congress passed the new debt ceiling bill, Federal debt has accelerated with several hundred billion dollars being borrowed each month for multiple purposes. In fact, it has increased at such a rate that the current legislation voted upon doesn’t appear to be enough to last into early January, much less through next year’s elections and up to 2013 as promised.
What also is being missed is the role of the ‘Super Congress’ which was created as part of the August debt ceiling bill, with a mandate to cut trillions of dollars out of the budget over the next 10 years. In November, when the deadline came and went, nothing was done by this appointed committee, and another legislative promise to the American people was ignored.
The inability and lack of willpower to cut spending and stop the insatiable borrowing by the government is why many investors and analysts predict a worsening economic outlook for 2012. There are no indications of central banks or sovereign governments willing to institute any form of austerity measures, at a time when the debt and liquidity crisis soars to catasrophic levels.
The week between Christmas and New Years is normally very slow for the economy and the markets, and may be why President Obama and his administration are seeking to print another $1.2 trillion before the end of the year, and call for a new increase in the debt ceiling. For the American people, the dog and pony show between Congress and the White House back in July appears to be nothing more than a false appeasement, with the intended purpose of mainting the status quo of out of control spending.