U.S. borrowing to surge after debt ceiling raised

[Playinghardball]

Source: Raw Story
By Agence France-Presse

WASHINGTON — The US Treasury said Monday that it will step up borrowing after the debt ceiling is raised, expected this week if a highly contentious legislation crafted over the weekend clears Congress.

In its quarterly funding plans, the Treasury said it expected to issue $331 billion in net debt in the July-September quarter, up from $190 billion in the previous period.

But the third-quarter forecast was $74 billion lower than originally forecast in May.

During October-December, the Treasury will borrow another $285 billion, it said. The projections assume it will have a cash balance of $100 billion at year-end.

The forecast came as Democratic and Republican Party leaders in Congress both strained to get rank-and-file support for a bill on spending cuts that would also raise the country's statutory $14.3 trillion borrowing ceiling, allowing the government to continue to meet its spending commitments.

More at: http://www.rawstory.com/rs/2011/08/01/u-s-borrowing-to-surge-after-debt-ceiling-raised/

[ixion]

1. What's the point of having a ceiling if you just raise it and keep borrowing?

It doesn't effectively mean anything if you raise it every time you near it.

[Cool Logic]

2. I have no idea...however, I was surprised when I learned that Democrats passed it...

way back in 1917.

[Igel]

3. Well, yeah.

That's sort of the (R)'s point. It used to be the (D)'s point, but now it's one that we usually say is utterly false and unreasonable.

We borrow 40% of every dollar spent, but accounts were raided, internal IOUs issued, debts racked up in the last couple of months to keep on spending and acting as though we were spending long after standard procedure would have exceded that $14.3 trillion debt limit. So they have to borrow now to repay all that money. If Obama's "we have to increase the debt ceiling to pay debts we already have" means anything, that's it; he was widely interpreted to mean something along the line of "everything in the budget is considered spent," as thought budget = debt.

If no debt ceiling increase, spending would have been cut 40%. It would have been cut further because a lot of the money "borrowed" was already expensed and couldn't be easily cut.