National Debt 2013 year end 16.738T, Current 17.15T

Attic

Diamond Member
Jan 9, 2010
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Fiscal year ends Sept 30 for government accounting.

Anybody else looked into some of the results of the extraordinary measures the treasury took in 2013 to keep the under the debt limit as it relates to 2013/2014 deficits? As I look at it, it appears the result of those extraordinary measures are being felt in 2014 deficit levels and may impact the total for 2014.

In 2013 we ran a deficit of roughly 680billion dollars and ended with a national debt of 16.738 trillion.

Today our national debt stands at ~17.15 trillion. Over a 400 billion deficit only a few months into 2014 fiscal year. Whats the significant or insignificance of this? Did the accounting measures to keep under the debt limit ceiling during the debt limit debate land in 2014? What else explains the massive debt increase relative to the time period between end of fiscal year 2013 and today?

We had the largest single day debt increase in the nations history on or about Oct 17, did that take care of the debt we couldn't account for in 2013 due to the debt limit or can we expect the massive current deficit simply to last the treasury through 2/3's of fiscal year 2014?

I'm really wondering if the 680billion deficit for 2013 is going to be relevant for 2014 or not. The Fed is purchasing 70% of new treasury debt issuance and, this becomes a lower number (less of a problem) if we keep current QE levels and government runs a larger deficit for 2014.

Does anyone have the numbers for estimated deficit for 2014 and where that lands related to current national debt of 17.15trillion? I can find deficit estimates, but not a deficit estimate that explicitly states where that puts national debt. I have a hard time believing national debt will be < 17.5 trillion on Sept 30 2014 unless our current deficit is scheduled to fund us through April/May.

This article might be of interest and is where i'm grabbing my numbers.

The U.S. national debt breached a record $17 trillion on October 17 2013, greater than the economic output of the entire country. This was right after the government shutdown ended and the debt ceiling was raised. Democrats and Republicans ended the stalemate by forming a budget conference committee to try and agree on how to lower the debt. This debt crisis has been ongoing since 2011, when the U.S. headed toward a debt default, and continued with the fiscal cliff crisis in 2012.
http://useconomy.about.com/od/usdebtanddeficit/a/National-Debt-by-Year.htm
 
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Anarchist420

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Feb 13, 2010
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It really sucks. Goes to show that tax increases never reduce the deficit.

There is just no reason for the u.s. govt collecting more revenues if it isn't going to balance the budget.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
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Oct 30, 2000
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Accounting tricks; move debts that should be paid into the next-fiscal year
 

Matt1970

Lifer
Mar 19, 2007
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Accounting tricks; move debts that should be paid into the next-fiscal year

Yep. Of course the higher that expected payback during 2013 from the 2009 Tarp makes the deficit look like it was reduced even further when it really wasn't.
 

Attic

Diamond Member
Jan 9, 2010
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Yep. Of course the higher that expected payback during 2013 from the 2009 Tarp makes the deficit look like it was reduced even further when it really wasn't.

Use normalized interest rates and the scheme is even more clear. Manipulated interest rates have shaved off hundreds of billions in interest payments since QE began.

There was also a record high level of remittances the Fed gave to the treasury for 2013. In 2013 the Fed gave the treasury nearly 100 billion cash that the Fed "earned" from interest on its book, the book mostly being holdings of treasury and mortgage debt bought with printed money. In 2008 Fed remittances to the Treasury were under 20 billion. It's quite the scheme.

One can only wonder how long before the Fed prints it's book to 10 trillion and owns nearly everything and then under the remittance clause simply hands over 99.8% of the interest every year to the treasury. All possible for an institution devoid of assets or collateral due to the wonders of unmitigated money printing. Distill it a bit and it's clear the Fed owns millions of future man hours of work that it bought with nothing and backed with nothing. Nice the value of labor the Fed is implicitly bidding here. Treasuries represent calls on future dollars from citizens, and the Fed is buying massive amounts of treasuries with money it hasn't done a thing for other than conjuring it up out of nowhere.

But interest rates have to stay low and USGove needs to borrow over 1trillion a year so the Fed book will have to grow for the foreseeable future, benefit being those beautiful remittances from the Fed that go right back to USGov. All the while slowly, for now, stealing the value of another's labor. Bankers sitting at every stop on this transaction train getting fat off shuffling clearly worthless numbers.

"Give me control of a nations money supply, and I care not who makes it&#8217;s laws"

Just remember who owns the Fed.
 
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rudder

Lifer
Nov 9, 2000
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So many posters here swear that the government is not spending enough and that is why the economy is still sluggish. All this QE does nothing except make obamas Wall Street buddies richer. Wages are down, more people are out of the labor market, but by all means let's keep spending more. If you don't favor spending you are a racist.
 

oynaz

Platinum Member
May 14, 2003
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Spending more alone is not going to cut it. Spending more and spending it right - that can get things moving. The Marshall Plan is a historic example (even though many of the benefits might have been accidental), though of course the conditions were vastly different.
 

JTsyo

Lifer
Nov 18, 2007
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Would it be possible to compare the deficit so far this year to the change in debt to see if they match up or if there was a carryover from 2013?
 

Attic

Diamond Member
Jan 9, 2010
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Would it be possible to compare the deficit so far this year to the change in debt to see if they match up or if there was a carryover from 2013?

I'm seeing reports that the deficit for Oct 2013, the first month of fiscal year 2014, was 92billion. But the national debt increased 400 billion for that period. I'm not sure if it is as simple as an accounting gimmick, but it appears some news outlets aren't squaring the fact that a 92billion dollar deficit for Oct 2013 should put the national debt at 16.83billion when the national debt in reality stood at ~17.1trillion at the end of Oct 2013. Not clear how this major discrepancy is getting squared or where the unaccounted for national debt belongs in a fiscal year.

It appears clear there's a shuffle of some hundreds of billions of dollars, from what I'm seeing it belongs in 2013 but due to extraordinary measures part of the debt build up wasn't accounted for until Oct 17, but it's still not being accounted for in Oct deficits. Regardless the national debt total stood at ~16.7trillion end of 2013 fiscal year and we are now at 17.15trillion.


Across-the-board spending cuts, a better economy and the partial shutdown combined to help the U.S. government kick off the 2014 budget year with a smaller deficit. A steadily shrinking deficit, however, has done little to jumpstart tense budget negotiations in Washington to keep the government open past January.
The Treasury Department said Wednesday that the deficit in October was $91.6 billion. That's 24 percent lower than the $120 billion imbalance recorded in October 2012. The deficit is the gap between the government's tax revenue and spending.
The decline comes after the government reported last month that it ran an annual deficit of $680 billion in the budget year that ended on Sept. 30. That was the lowest in five years and the first in that period below $1 trillion. It's also half the record $1.4 trillion gap reported in 2009.
http://abcnews.go.com/Business/wireStory/us-budget-deficit-falls-24-percent-october-20878320


Beyond this, anyone looking at fiscal year ends to our current day today, knows that the national debt rose at greater than 2.5billion per day every day since Sept 30 2012. This doesn't square with fiscal year 2013 deficit totals or Oct of 2014 deficit combined with 2013 deficit totals.

Regardless the national debt is increasing on average 2.65billion per day since Sept 30 2012 and it indicates that true deficits for 2013 and 2014 will be at or above 1 trillion. As Matt pointed out above, these huge deficits still benefit from tarp repayments and other one off benefits which sandbag what's really going on.
 
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dullard

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May 21, 2001
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Here is the debt balance on Oct 16, 2013 (see page 2, Table III-C, rounded to the nearest million): $16,699,396,000,000. The legal debt limit was 16,699,421,000,000

Source: https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=13101600.pdf

So, you can see, that they were quite near about the legal borrowing limit on Oct 16. But on Oct 17, 2013, the legal debt limit was suspended. Thus the government went out and borrowed money that day. They borrowed $259,433,000,000 (page 2, Table III-A).

Source: https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=13101800.pdf

But here is what you are missing. Just because you borrow money (more debt) doesn't mean you spend it (deficit). I could go to a bank on Monday and borrow $10,000 to renovate my house. My debt went up $10,000 on that day. That doesn't mean that I spent any money. My deficit could very well be $0 that day (as long as I spend the same amount that I earned that day). Heck, I don't even have to spend that $10,000 until months later.

In the short term, deficits don't add up to the debt increases and debt increases doesn't add up to deficits. Borrowing adds to the debt. Just because we borrowed money doesn't mean we spent it yet. That is where you have a discrepancy. We can easily borrow $400 billion in a month (debt goes up by $400 billion) but only spend $92 billion more than we bring in during the same month (deficit is $92 billion that month). It just means in the next few months we don't need to borrow money (or it means we are borrowing money for past deficits to bring our bank balance back up to normal). In the long term, your thinking is correct. Deficits eventually add up to debt. But not in the short term.
 
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Attic

Diamond Member
Jan 9, 2010
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Here is the debt balance on Oct 16, 2013 (see page 2, Table III-C, rounded to the nearest million): $16,699,396,000,000. The legal debt limit was 16,699,421,000,000

Source: https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=13101600.pdf

So, you can see, that they were quite near about the legal borrowing limit on Oct 16. But on Oct 17, 2013, the legal debt limit was suspended. Thus the government went out and borrowed money that day. They borrowed $259,433,000,000 (page 2, Table III-A).

Source: https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=13101800.pdf

But here is what you are missing. Just because you borrow money (more debt) doesn't mean you spend it (deficit). I could go to a bank on Monday and borrow $10,000 to renovate my house. My debt went up $10,000 on that day. That doesn't mean that I spent any money. My deficit could very well be $0 that day (as long as I spend the same amount that I earned that day). Heck, I don't even have to spend that $10,000 until months later.

In the short term, deficits don't add up to the debt increases and debt increases doesn't add up to deficits. Borrowing adds to the debt. Just because we borrowed money doesn't mean we spent it yet. That is where you have a discrepancy. We can easily borrow $400 billion in a month (debt goes up by $400 billion) but only spend $92 billion more than we bring in during the same month (deficit is $92 billion that month). It just means in the next few months we don't need to borrow money (or it means we are borrowing money for past deficits to bring our bank balance back up to normal). In the long term, your thinking is correct. Deficits eventually add up to debt. But not in the short term.

Thanks for additional clarity here. The additional debt (jump from fiscal year end 2013 of 16.738T to current 17.15T) can be used to get us through some amount of additional future months deficits. I'm still unclear how that massive one day borrowing spree fits into being applied to future months deficits vs the suspension of the national debt that occurred in 2013 due to extraordinary measures taken by the treasury; specifically as it relates to whats outlined here:

Article Date July 29th,
70 Straight Days: Treasury Says Debt Stuck at Exactly $16,699,396,000,000.00

(CNSNews.com) - According to the Daily Treasury Statement for July 26, which the Treasury released this afternoon, the federal debt has been stuck at exactly $16,699,396,000,000.00 for 70 straight days.

That is approximately $25 million below the legal limit of $16,699,421,095,673.60 that Congress has imposed on the debt.

The portion of the federal debt subject to the legal limit set by Congress first hit $16,699,396,000,000.00 at the close of business on May 17. At the close of every business day since then, it has also been $16,699,396,000,000.00, according to the official accounting published by the Treasury Department.

If the debt had increased by even $30 million at any time during those 70 days, it would have exceeded the statutory limit. But, according to the Treasury, the debt did not do that. Instead, it remained precisely $16,699,396,000,000.00.

Even though the government's official accounting of the debt has not budged for 70 days, the Treasury has continued to sell bills, notes and bonds at a value that exceeds the value of the bills, notes and bonds it was redeeming.

In fact, according to the Daily Treasury Statement for May 17, the Treasury had by then already redeemed approximately $4,776,995,000,000.00 since the beginning of the fiscal year (which started on Oct. 1, 2012). As of that same day, the Treasury had already sold $5,354,508,000.000.00 new bills, notes and bonds during the fiscal year. That represented a net increase in publicly circulating U.S. government debt instruments of $577,513,000,000.00 for the fiscal year.

As of July 26, according to the latest Treasury statement, the Treasury had already redeemed approximately $6,128,368,000,000.00 in bills, notes and bonds during this fiscal year. But, at the same time, according to the statement, the Treasury had sold an additional $6,759,148,000,000.00 bills, note and bonds--for a net increase of $630,780,000,000.00 for the year.

Thus, the value of U.S. Treasury debt instruments circulating in the public has increased $53.267 billion since May 17--even though the Treasury says the debt has remained exactly at $16,699,396,000,000.00 during that time.

How could the value of extant U.S. Treasury securities increase by $53.267 billion during a 70-day period when the federal government’s debt subject to the legal limit has remained constant at $16,699,396,000,000.00—just $25 million below the legal limit?

On May 17, the day the debt began its long stay at $16,699,396,000,000.00, Treasury Secretary Lew sent a letter to House Speaker John Boehner. In the letter, Lew said the Treasury would begin implementing what he called “the standard set of extraordinary measures” that allows the Treasury to continue to borrow and spend money even after it has hit the legal debt limit.

Full Article

The last paragraph is what sticks out to me. "Lew said the Treasury would begin implementing what he called “the standard set of extraordinary measures” that allows the Treasury to continue to borrow and spend money even after it has hit the legal debt limit."

The legal debt limit appears to be a mirage, many tricks can and were used to get around it while the country spent beyond the legal debt limit in fiscal year 2013. I'm still not convinced the massive one day jump in national debt, many have pegged at over 300billion, wasn't used to back fill some of the extraordinary measures taken in 2013 as well as provide a buffer for additional months deficits leading to another debt ceiling debate in a few months. I'm somewhat resigned to seeing the national debt total at end of 2014 to see how this plays out,.. unless of course extraordinary measures are once again taken and we get another massive single day record debt increase that lands sometime in fiscal year 2015.

It still looks to me like it takes trillion dollar deficits to run the country for a year even if with some accounting tricks certain years can be shown to be substantially less.

I'm quite convinced new legislation will redefine what counts as national debt (remove Social Security IOU's and other intra government debt) to get our current debt total 17.15T down a few trillion from where it otherwise would be and that this will occur during the shuffle of some additional "extraordinary" measures taken by the treasury to get us through a fiscal year.

Basically we know the government needs to spend more to get the economy on it's own feet (able to pay for government largesse going forward) but we know spending more in our current state gets us down this scary path of debt to GDP ratios >100%. Looks like we'll spend more and rework numbers to get debt to GDP (on the surface) at or below 100%. We've already refined how we account for GDP totals to make GDP increase >500billion vs accounting methods previously employed, all that's left is reworking debt numbers so that measured yesterday vs today gives today a much lower measurement vs previous standards.
 

simpletron

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Oct 31, 2008
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Attic, one of the largest "extraordinary measures" the treasury has is the G-Fund from the TPS accounts(401K-like accounts) of government employees. The Treasury can replace G-fund, normally made of government bonds that count towards the debt limit, with IOUs. These IOUs behave exactly behave like the treasuries they replaced(aka the Treasury owes the IOUs the same amount of interest and have the principal value), but the IOUs don't count towards the debt limit. This was 175 billion dollar accounting trick in the latest debt ceiling battle. The treasury has some more accounting tricks to hide debt from the debt limit.

http://www.treasury.gov/initiatives/Documents/11-15-2013 G Fund Package.pdf

On Oct 17, The treasury undid all of its accounting tricks, so the debt is shown in the right place. So most of that debt increase had already occurred, but was hidden and a little from the selling of new bonds.

Here is a list of past treasury auctions, If you feel like figuring out how many bonds the treasury sold and redeemed.
http://www.treasurydirect.gov/instit/annceresult/press/preanre/2013/2013.htm
 

GTaudiophile

Lifer
Oct 24, 2000
29,767
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It's not a matter of IF but WHEN the house of cards will collapse.

We're in a bubble right now...as bad as it looks.
 

Engineer

Elite Member
Oct 9, 1999
39,230
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It's not a matter of IF but WHEN the house of cards will collapse.

We're in a bubble right now...as bad as it looks.

The US seems to have been in one bubble or another for the last 30 years. Seems that is the only way we can grow at all, if you call it that.
 

Franz316

Senior member
Sep 12, 2000
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What kind of sucker thinks that 17 trillion+ is ever going to be repaid, lol. At this point it may as well be monopoly money.