“You add one to the trillions place” is how we need to teach math in the Age of Obama. It happened again to our national debt on Thursday, for the seventh time in just five years — we added another 1 to the trillions place, for a total national debt of about $17,075,000,000,000. Over $12,000,000,000,000 of that is held by the public, meaning that the vig on that much must be paid or else we go into default. “Public” includes China, which holds one of those trillions places, plus change.
I didn’t leave out any zeroes, did I?
It was a remarkable thing, but on Wednesday the debt stood at a comparatively paltry $16,738,000,000,000 — meaning we added about $328,000,000,000 (that’s Billion with a B) on Thursday alone. That beat our previous record of issuing $238,000,000,000 in one day back in 2011.
Why the explosion of a third of a trillion dollars on Thursday? That’s the day Congress agreed to raise the debt limit, an action which President Obama had assured us “wouldn’t raise the debt.” But — surprise! — our debt popped up like the Treasury Department had released a beach ball from the bottom of the deep end of the swimming pool.
The big float was due entirely to the debt ceiling, which forced Treasury to resort to “extraordinary measures” to keep the books balanced, as Congress kept spending money the Treasury didn’t have. This year’s deficit — the total added to the debt — is expected to be “only” $744,000,000,000, or 4.4% of GDP. The economy is expected to grow less than 2.5% this year. What that means is that although President Obama loves to take credit for shrinking the deficit he caused to balloon, our total indebtedness is still growing faster than the economy.
Keep in mind please that another trillion of our economy — $1,020,000,000,000 to be exact — is due to the Fed’s buying up of $85,000,000,000 in securities each and every month. That’s over 5% of GDP. In other words, minus the Fed’s relentless pursuit of an illusory “wealth effect,” the economy would actually shrink about 2.5% this year.
Let’s look at the problem from one more angle. The U.S, economy is so weak, it can’t even produce mild inflation when the Federal government conjures up nearly two trillion dollars of make-believe money in a year.