US Treasury Tells Lawmakers It Needs $2 Trillion In Debt Capacity (to fund the US to end of 2011)

Zero Hedge ^ | May 4, 2011 | Tyler Durden

[Zakeet]

Reuters reports that the US Treasury has informed lawmakers it needs a $2 trillion debt limit increase to operate... until the end of 2012. Better stated, this is 112% of US GDP (which will soon be declining). This is precisely as Zero Hedge speculated. We hope PIMCO will be swayed soon enough to buy all this extra debt about to start coming down Geithner's conveyor chute. But yes, the Fed will most certainly not be needed to monetize this extra debt: Japan, Europe and Libya have it covered. That said, we don't know if Libyan rebels will have the capacity to monetize the $3 trillion in debt in 2013, $4 trillion in 2014, and so forth. The pattern is clear.

---

See also: U.S. Treasury Says $2 Trillion More Needed Just for 2011

[Zakeet]

I can't find the original article ... yet. However, according to another Reuters article from earlier today, Highlights from quarterly U.S. debt refunding:

• When the note and bond sales are settled on May 16, they will exhaust the government's remaining borrowing capacity under the $14.3 trillion statutory debt limit. This will require the government to employ emergency measures to continue borrowing, but these will only be sufficient until Aug. 2, according to Treasury projections. The measures include dipping into two federal employee pension funds.

• The Treasury made no changes to its debt auction plans, but said that if Congress fails to raise the debt limit by Aug. 2, it will make alterations to its bill and coupon auction schedules. It said it will provide as much notice of this to markets as possible.

• The Treasury said that assuming a debt limit increase, it expects nominal coupon auction sizes to remain steady in the upcoming quarter, adding that the current suite of issuance offers Treasury debt managers flexibility to respond to a range of different financing scenarios.

In other words, Congress, Geithner, Bernanke and the Wee Wee are backed into a corner, have spent the country into oblivion, are considering default, and are virtually guaranteeing QE3.

Elections have consequences.

[bgill]

Here’s an idea. Have all these lawmakers turn over their under the table $$$ and we’d be half way there. The other half could be made up with cutting their government funded perks. Throw in a severe slashing of gimme programs and we’re already to two years ahead. Kick the illegals and other moochers off the government teat and we’re ten years ahead of the game.

[backwoods-engineer]

the US Treasury has informed lawmakers it needs a $2 trillion debt limit increase to operate... until the end of 2012

Not just NO, HELL NO. We must not do this, because if we do, the Fed will create as much fake money as they are allowed to do. The deficit MUST begin to decrease, or the dollar is doomed--and quickly.

The dollar index flirted with 72.7 today. Some people say that if it crosses 72, a major collapse is underway.

[KarlInOhio]

The measures include dipping into two federal employee pension funds.

Isn't that the type of action which will get a CEO tossed in jail (or else bailed out with a big pile of taxpayer borrowed Chinese cash) if he gets caught?

Forget slightly toasted - this is going to be a Cajun charred set of cooked books by the time Tax Cheat Timmy is done.

[WOSG]

Wow.

The Congress should in no way give them $2 trillion ... that is absurd. No more than $200 billion at a time.

They have about $4 trillion in treasuries cross-held in the Social Security accounts. They could turn them into IOUs and dont need a penny more in treasury obligations.

[ken5050]

From a purely tactical viewpoint, the basic strategy of negotiations is that your opening offer is never your actual number. If they want ONE Trillion, start out by asking for TWO, then offer to cut it back to ONE...and depict those evil Republicans as being unwilling to compromise, and thus, it’s all their fault.

[Secret Agent Man]

How can anyone, after this admin (treasury is part of admin) begs congress to raise the debt ceiling 2 trillion dollars in ONE YEAR in order to fund the remaining half of the year,

how can anyone say such an administration is deserving of re-election, because of it’s “successful track record”? If you’re beggin to raise the debt ceiling two trillion just to pay off the remaining year, there’s no way in hell they are doing a good job. I don’t care who would be in office, democrat or republican.

This alone ought to tank his reputation to be re-elected. It should automatically disqualify him from being taken seriously or ever letting Obama or any of his underlings be unchallenged when they say things are going well and they are doing a good job with the country.

[Secret Agent Man]

After all, if these guys were running a private company...

let’s just say the very same Obama who’s asking the debt ceiling be raised 2 trillion so his govt can keep functioning to the end of the year, is the same Obama who’s ripped CEOs up and down for fiscal mismanagement and replaced a couple that were stupid enough to take government bailout money.

[TheOldLady]

Secure Her Future
Support Free Republic

Sponsoring FReepers leapfrog0202 and another person will contribute $10
Each time a new monthly donor signs up!
Get more bang for your buck
Sign up today

Save Lazamataz

[circlecity]

"...the $3 trillion in debt in 2013, $4 trillion in 2014, and so forth. The pattern is clear."

The train is gaining speed exponentially and the cliff is in sight. With numbers this incomprehensibly big no one has a clue how this is gonna end - it's out of control.

[MichaelCorleone]

-—The measures include dipping into two federal employee pension funds.-—

IRA/401K’s next?

[Mariner]

Absolutely not.

HELL no.

[org.whodat]

There is no money in those accounts, just more iou’s, so the government will now borrow money from accounts where funds are already spent. Qe3 with a twist.

[SatinDoll]

“...the US Treasury has informed lawmakers it needs a $2 trillion debt limit increase to operate... until the end of 2012...”

“Not just NO, HELL NO. We must not do this, because if we do, the Fed will create as much fake money as they are allowed to do. The deficit MUST begin to decrease, or the dollar is doomed—and quickly.”

I agree with you - 100%!

We can’t take on anymore debt, period. Right now we should be working on ridding ourselves of the huge debt we already possess.

[ANGGAPO]

The answer should be to cut 2 Trillion in Government spending to fill the gap. Every home owner is faced with the same problem, and we can't print funny money. The Obama government spent the money knowing that we couldn't cover the debt. So don't ask us to foot the bill for you.