USA Watchdog
This week, Treasury Secretary Tim Geithner proposed raising the debt ceiling by $2 trillion. I thought, this should be big news! After all, a trillion is a thousand billion. This adds up to 2 thousand billion over the next 2 years!! The mainstream media greeted this story with a great big yawn. I do not get that because the Republicans and Democrats fought for weeks to only cut the budget a measly $38 billion. The press was non-stop, and Congress was only an hour away from shutting down the government. Even the $38 billion cut was a big fat lie according to CBS News. The story said in mid-April, “Well, thanks to the Congressional Budget Office and some great reporting by the Washington Post, it turns out the government won’t be cutting $38 billion in one year after all. No, the real cuts will be more like $352 million! You heard me right, $352 million, NOT $38 billion. The rest? Mostly smoke, mirrors and accounting gimmicks.” (Click here for the entire CBS News story.)
Both parties want to cut roughly $4 trillion out of the budget over the next 10 to 12 years. Can someone please explain how that is accomplished by tacking on another $2 trillion to the national tab? I do not get the math and neither does Bill Gross, the head of the biggest bond fund in the world. He said in early January, “We have a deficit in the $1 trillion plus arena, which means we must borrow at least a trillion dollars additional a year in order to fund the deficit. And, so, the debt ceiling currently at $14.3 trillion, which is 95% of GDP, has to go up by another trillion or so every 12 months.” (Click here to read my original post on the debt ceiling.) Not long after Gross made this statement, he sold most, if not all, of his U.S Treasuries. What do you know? He was right on the money. The proposal from the Treasury is a $2 trillion increase in the debt ceiling to cover the next 2 years.
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