I.O.U.S.A. on steroids
Don't look now, but the national debt has exploded ever since Lehman Bros. blew up.
Indeed, I.O.U.S.A. has gone further into the hole over the last six weeks than it did in the entire year preceding.
Addison looked at some of the figures last week in the 5 Min. Forecast, extrapolating the figures from October 1 through October 15 to yield a hypothetical national debt of $17 trillion a year from now. And you can play with the numbers yourself at the Treasury Department website. But here's some more of the story.
On Friday, September 14, 2007 — a year before Lehman Bros. went under — the national debt totaled $9,017,119,869,519.37.
On Friday, September 12, 2008 — the last business day before Lehman Bros. went to investment-bank heaven — the national debt totaled $9,683,319,152,145.35.
That's a one-year increase of $666 billion dollars (which of course is a lot more than the officially stated "federal deficit" figure, but that's another story) or 7.4%.
As of last Friday, October 24 — the last date available — the total is $10,523,955,355,856.66.
So in six weeks the national debt has jumped $840 billion, or 8.7%.
The previous $840 billion jump took nearly 18 months. This one took six weeks.
$200 billion of that $840 billion, give or take, came in a mere three-day span after the House rejected the bailout bill and the Dow made its epic 777-point drop.
Ambitious readers might want to plot this on a chart; my own attempt to paste the numbers into Excel was more trouble than it was worth. But I can only imagine the national debt is, as chart fanatics might say, "going parabolic."
Sphere: Related Content
Seriously, I have a question. How much of this can the system of government finance take before it begins to break down ? At what point, if any, will the federal government simply be unable to continue this sort of thing ?
Comment on October 28, 2008 @ 1:46 pm
Maybe the plot runs something like this: The USA govt. is going to default on its debt at some point,like 2009.The credit crisis is a
manufactured precurser event to ensure that
the international playingfeild is levelled beforehand.
Comment on October 28, 2008 @ 3:42 pm
While Cyrill’s response is interesting, it also seems rather insane. I would advise psychological counseling !
But the question remains. How long can the Federal Government run up debts like this, accumulating interest at this pace, before the system reaches an economic point ? What would a “default” look like ?
Comment on October 28, 2008 @ 4:21 pm
What would a default look like?? Iceland times 10,000 roughly. We are not there yet to be sure but the odds of it happening are certainly growing by the day. Maybe the government hopes to sell all of its’ preferred stock in the banks and AIG (lol!)for a huge profit to stave off disaster.
Comment on October 28, 2008 @ 6:29 pm
I am still having trouble with figuring out the war between inflation and deflation. In normal times all these trillions of dollars of deficit spending would create latin american style inflation. I mean Dirksen said , “a billion here abillion there and after a while you are talking real money.” Now its a trillion here and a trillion… but I don’t feel a thousand times richer. anyway it seems tens of trillions are going to money heaven in the deleveraging so it seems deflation is going to win. It is certainly happening in commodities. or is that just the most recent bubble bursting. However the interest on these borrowings of the Feds will have to be paid. and somebody will have to be willing to lend to our government - we could have the worst of both worlds with the dollar becoming worthless and deflation still happening. what happens to gold in a deflationary scenari? the world economy is like this large spinning top. Have you ever noticed how before they quit spinning and fall over they have these increasingly wild gyrations? does that sound familiar?
Comment on October 29, 2008 @ 12:28 am
jmb
Leave out the fear mongering. It’s not Iceland times 10,000, it’s only Iceland times 1,000.
Chill, dude.
Comment on October 30, 2008 @ 10:20 pm
this is dumb
Comment on November 4, 2008 @ 2:57 pm