The Federal Government has continued to issue new debt despite the debt ceiling. It has done so by using its big pile of cash to pay down the debt it owes to Social Security and to government and military pension fund beneficiaries. That internal debt is included in the debt subject to limit. By paying down the internal debt, the government makes room to add to its public debt. It thus maintains a regular schedule of new issuance.
Time Bomb Ticks As US Continues to Issue New Debt Despite Debt Ceiling
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David Stockman’s Contra Corner isn’t your typical financial tipsheet. Instead it’s an ongoing dialogue about what’s really happening in the markets… the economy… and governments… so you can understand the world around you and make better decisions for yourself.
David believes the world -- certainly the United States -- is at a great inflection point in human history. The massive credit inflation of the last three decades has reached its apogee and is now going to splatter spectacularly.
This will have lasting ramifications on how governments tax and regulate you… the type of work you and your family members will have available and what you get paid… the value of your nest egg… and all other areas comprising your quality of life.