Deja Vu: U.S. to exhaust borrowing capacity by October 17: Treasury

[Acura604]

ok... we see this every year..and there's always a 'last minute' resolution to this... BUT what if... nothing gets resolved at that last minute... what would the consequences be for the USA?





(Reuters) - U.S. Treasury Secretary Jack Lew warned Congress on Wednesday that the United States would exhaust its borrowing capacity no later than October 17, at which point it would have only about $30 billion in cash on hand.

The fresh estimate adds another layer of pressure on lawmakers to raise the $16.7 trillion debt limit and comes as Congress struggles to pass a spending bill to keep the government funded beyond October 1, when the new fiscal year starts.

"If the government should ultimately become unable to pay all of its bills, the results could be catastrophic," Lew said in a letter to congressional leaders.

The fate of the debt ceiling is up in the air with Democratic and Republican lawmakers once again deeply divided over how to extend the Treasury's borrowing authority.

The Republican-controlled House of Representatives, which used the debt ceiling to extract fiscal concessions from Democrats in 2011, is focused on dismantling Obama's health care law in exchange for their debt limit vote.

House Republican leaders said there is no decision yet on what might be contained in a debt limit bill that could hit the House floor as early as Friday.

But President Barack Obama has said he will not negotiate with Republicans on extending the Treasury's borrowing capacity and Democratic lawmakers are pushing for a clean debt limit raise.

A spokesman for Republican House Speaker John Boehner said Lew's warning was "another reminder that we need to work together soon on a bill that raises the debt limit and deals with causes of the debt by cutting Washington spending and increasing economic growth."

"It should remind President Obama that refusing to negotiate with Congress on solutions just isn't an option," Boehner's spokesman Michael Steel said.

The government has been scraping up against the debt ceiling since May, but it has avoided defaulting on any of its obligations by employing emergency measures to manage its cash, such as suspending investments in pension funds for federal workers.

Previously, the U.S. Treasury had said those cash management tools would be exhausted around mid-October, at which time it expected to have $50 billion in cash on hand.

In his letter on Wednesday, Lew said the updated estimate reflected fresh information on quarterly tax receipts and the activities of certain large government trust funds.

In an attempt to get ahead of the looming debt limit deadline, the Republican-controlled House passed a temporary spending bill that included a provision that would direct the Treasury to pay bondholders and Social Security retirement payments if Congress does not raise the cap on time.

Lew dismissed the provision and repeated the administration's position that any plan to prioritize certain government payments over others would be "simply default by another name."

"There is no way of knowing the damage any prioritization plan would have on our economy and financial markets," he said.

Lew also warned that a repeat of the brinkmanship over the debt limit seen in 2011, which led to a downgrade in the United States' pristine credit rating, would inflict even more harm on the economy now.

"If the government should ultimately become unable to pay all of its bills, the results could be catastrophic," he said.

[Carl Johnson]

meh nothing to worry about. just politics bs as usual.

[Mr.HappySilp]

Don't worry they will come up with something before then. However keep raiding the debt ceiling isn't the solution. They need to somehow control spendings and maybe even cut some social programs?

[Infiniti]

^ what social programs..?

[tiger_handheld]

whats the next word after .. million, billion, trillion... whats next?

[lowside67]

Quadrillion, true story.

[TatsuyaKataoka]

The extreme wing of the GOP saying "kill Obamacare or we shut the government down". It's funny how half the people in the richest country on earth think something as essential as universal health care is some kind of communist, Orwellian behemoth.

"KEEP THE GUBMINT OUT OF IT" they scream while private insurers stop covering people when they get raped.

[Ulic Qel-Droma]

they dont need to pay off their debts.

they'll just send predator drones instead of payments.

lololol


i hope the market fucking crashes hard. it would be a healthy thing for the long term.

order arises from chaos.

[noventa]

Originally Posted by tiger_handheld

whats the next word after .. million, billion, trillion... whats next?

the next one would be bazillion sir.

[urrh]

i'm probably wrong but i thought the US already owes more in the way of interest in it's loans than it takes in from taxes and stuff

[dat_steve]

Originally Posted by Ulic Qel-Droma

order arises from chaos.

[Gridlock]

Originally Posted by urrh

i'm probably wrong but i thought the US already owes more in the way of interest in it's loans than it takes in from taxes and stuff

No no.

Man, people are too hard on the americans!

They are still, and will be for a long time, the largest economy on the globe. We're talking so far vast that a recession, long and pronounced as it was didn't even make it close that another economy could be within grasp of the #1 position.

Europe is far worse in terms of debt. Some european countries are at 130-140% of GDP in their overall debt, and the us is like 80% according to wikipedia. Japan 174%. Greece 160% Italy and Portugal are at 115ish.

So yeah, not great...but not bad.

Plus, their ability to increase their economy is far greater than Canada could ever pull off. They have a motivation issue(as do we) and productivity issues, but hands down, far and away the states is the country for intuitive solutions.

I've often said that a problem here in Vancouver(and Canada in general) is cost of entry. Can you imagine how many small businesses we could have with access to cheaper land and lower taxes? There is a shit retail shop here in New West that has store after store bounce in and bounce back out because its high visibility location(good) also has it in shitsville for parking(bad)...and its $4500/month and smells like mothballs.

I haven't even turned on the lights yet, and I need to sell $4500 worth of product...net value! That's a lot of kelp and kale chips that the last vegan shop/yoga studio had to shift just to keep the name on the door(they didn't).

So we kill creativity based on cost of entry.

And it just goes on and on. It's one of those things that a LOT of people don't think about as when you are employed as its all in, but when people talk tax rates, its fucking brutal when you are self-employed. Want to change your address when you move? $30. Own a business at that address? $230. Fuck you, you'll pay it.

Business licence? PER CITY...$120 to start, and it goes up. They FINALLY made an all in licence because of how redonc it is to have to buy 12 of them if you are mobile. Screw you Maple Ridge. I worked there anyway

Not that the US is devoid of these issues. They have their own. There, they have every little district so segmented that you get punished for opening on the wrong side of the street. Towns can outlaw whatever they want and so on.

But still...hands down, I'd bet american every time. They can shave 1% off their military spending and solve half their financial problems. They create political ones, but just remember its all fake drama. A 1% change on a trillion dollar budget is a world of savings.

[El Bastardo]

Originally Posted by Gridlock

I'd bet american every time.

Someone has hacked Gridlock's account and is posting as him.

[Ulic Qel-Droma]

Originally Posted by dat_steve

I wasnt thinking nuclear chaotic, but... yeah. lol.

[finbar]

Let's see if I got this right.

Congress approves spending.

Congress decides to get it's balls in an uproar and not approve payment on the spending.

[Bouncing Bettys]

Originally Posted by tiger_handheld

whats the next word after .. million, billion, trillion... whats next?

Saw it somewhere - let me check my bank account...

*checks*



srs - American politics are so partisan they can't get anything done.

[iEatClams]

Originally Posted by Gridlock

No no.

Man, people are too hard on the americans!

They are still, and will be for a long time, the largest economy on the globe. We're talking so far vast that a recession, long and pronounced as it was didn't even make it close that another economy could be within grasp of the #1 position.

Europe is far worse in terms of debt. Some european countries are at 130-140% of GDP in their overall debt, and the us is like 80% according to wikipedia. Japan 174%. Greece 160% Italy and Portugal are at 115ish.

So yeah, not great...but not bad.

Plus, their ability to increase their economy is far greater than Canada could ever pull off. They have a motivation issue(as do we) and productivity issues, but hands down, far and away the states is the country for intuitive solutions.

I've often said that a problem here in Vancouver(and Canada in general) is cost of entry. Can you imagine how many small businesses we could have with access to cheaper land and lower taxes? There is a shit retail shop here in New West that has store after store bounce in and bounce back out because its high visibility location(good) also has it in shitsville for parking(bad)...and its $4500/month and smells like mothballs.

I haven't even turned on the lights yet, and I need to sell $4500 worth of product...net value! That's a lot of kelp and kale chips that the last vegan shop/yoga studio had to shift just to keep the name on the door(they didn't).

So we kill creativity based on cost of entry.

And it just goes on and on. It's one of those things that a LOT of people don't think about as when you are employed as its all in, but when people talk tax rates, its fucking brutal when you are self-employed. Want to change your address when you move? $30. Own a business at that address? $230. Fuck you, you'll pay it.

Business licence? PER CITY...$120 to start, and it goes up. They FINALLY made an all in licence because of how redonc it is to have to buy 12 of them if you are mobile. Screw you Maple Ridge. I worked there anyway

.

The cities are just milking it right now with all the new development they are approving. new developments = more tax $money for the city.

I work in a field related to commercial and multi-family real estate. The fact is, Vancouver has some of the most expensive commercial/industrial and office prices in the world. This is more related to the RE Bubble thread, but many are saying there's also a bubble in Vancouver's non-residential real estate market.

There is simply too little supply of Office/commercial and retail spaces in core areas in the lower mainland. Too much residential development and too little industrial/office and commercial. What use to be zoned as Commercial or light industrial gets approved by city planners to turn it into a high-rise tower or some in-fill residential complex.

for fck sakes, build some more retail/commercial please!
vacancy is super low and rent rates are too damn high for any businesses to start here. Make it competitive.

end rant//

[strykn]

Originally Posted by Ulic Qel-Droma

they dont need to pay off their debts.

they'll just send predator drones instead of payments.

lololol


i hope the market fucking crashes hard. it would be a healthy thing for the long term.

order arises from chaos.

my puts are ready m8