Posted on 12/29/2005 3:36:10 PM PST by libertarianPA
WASHINGTON (Reuters) - U.S. Treasury Secretary John Snow warned lawmakers on Thursday that a legally set limit on the government's ability to borrow will be hit in mid-February and urged Congress to raise it quickly.
Failure to do so potentially risks throwing the country into its first default in history, Snow warned in what has become virtually an annual rite as U.S. borrowing needs spiral.
"The administration now projects that the statutory debt limit, currently $8.184 trillion, will be reached in mid-February 2006," Snow said in a letter to 21 members of the U.S. House of Representatives and Senate released by Treasury after financial markets had closed.
Snow said that Treasury, if the debt limit was not raised by then, would have to take "extraordinary actions" to keep paying its bills for everything from Social Security to national defense spending.
Even if Treasury took "all available prudent and legal actions to avoid breaching the statutory debt limit, we anticipate that we can finance government operations no longer than mid-March."
The debt limit was last raised in November 2004 by $800 billion to its current level. The letter to Congress does not specify an amount the Treasury wants the ceiling set at this time.
But he said quick action was needed to preserve the U.S. ability to borrow in global capital markets at the lowest rates possible.
"A failure to increase the debt limit in a timely manner would threaten this unique and important position," Snow said.
The call for an increase in the debt ceiling typically provokes a round of criticism from opposition politicians over excessive government spending and the process is drawn out until nearly the last possible moment.
Treasury officials had said in November it was bracing for hefty borrowing needs in the January-March quarter, likely around a record $171 billion, and that it likely would hit the debt limit in that period.
Among other factors, the Treasury cited increased spending for rebuilding Gulf Coast areas hit hard by hurricanes Katrina and Rita.
Now THIS is the real bad news. The true danger. Murderous imbeciles in caves in Afghanistan could NEVER harm us in the way this can.
The only measure that matters in a real sense is the debt to GDP ratio, not the dollar amount.
Cut some dang spending.
World Bank? others? Is there a list?
If only we could get Republicans in office!
Bush can't even spell VETO, so what is the incentive for our congressional whores to stop spending?
Us. Most of the US debt is held by US citizens.
Government spending is out of control.
In what form? that much in bonds?
It was, yes. I don't know the current distribution.
Nor harm our offspring they way this drunken spending spree definitely will.
COME ON GEORGE. I LOVE YOU LIKE A BROTHER, BUT FOR GOD'S SAKE PLEASE VETO SOMETHING!
Sorry to yell, but it seems the GOP leadership is deaf and definitely dumb on this subject.
When my wife asked me to request a higher limit on her credit card, I just told her to stop spending. Maybe that would work for the government.
Debt (trillion) GDP (trillion) Ratio
2000 5.67 9.82 0.58
2001 5.81 10.13 0.57
2002 6.23 10.47 0.60
2003 6.78 10.97 0.62
2004 7.38 11.73 0.63
2005 7.93 12.44? 0.64
Nothing encouraging here.
Let's try that for a change.
So, are you planning to vote for them again?
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