A Day Of Reckoning

How Much Will It Grow Today?

You won’t see anything about today – a day of reckoning – on the evening news tonight, or read about it in the New York Times, or hear the talking heads on CNN debating its importance, or hear about it on talk radio; but today is a very important barometer day measuring the true fiscal health of the U.S. federal government.

This day will be ignored like it is every year. However, you will be able to see for yourself what is going on by just checking here yourself later today:
The Daily History of the Debt Results – U.S. Treasury Department

Actually, the real day of reckoning is the last business day of September (Sept 30th this year) but it won’t be reported until later today by the U.S. Treasury.

Why is today’s report special? What does today’s report mean?

I’ll explain below. However, up front, I’ll go out on a limb and predict it will be bad news to the tune of $100+ billion!

I predict the burgeoning National Debt will jump by $100+ billion from September 29th to September 30th… just ONE DAY. That day is reported today!

Later on, you will be able to judge for yourself if Azleader has any credibility whatsoever by comparing the September 29th report with the September 30th report. Such a deal!

What the Heck are You Talking About, Azleader?

I’m talking about the frightening growth of the National Debt(ND) and how current economic policies are hastening the demise of the “good faith and credit of the United States” and the economy of the nation in general.

You see, the last business day of September marks the end of the U. S. government’s fiscal year. It is the day the U. S. Treasury Department balances its books for the year.

You know its an important day because just last week we had a minor fiscal crisis threatening another government shutdown. Congress had to pass and President Obama had to sign a federal law to extend funding of the federal government for less than a week’s time just to take us into October and the start of the new fiscal year!

The powerful report in the link above reveals all when it comes to government fiscal responsibility!

Debt to The Penny

The Treasury doesn’t actually tell us when it balances its books but it is logical that fiscal year-end is one of those times.  It can also be surmised when Treasury balances its books by looking at older report history using the above link.

For any date ranges in 2004 or earlier you will see that there are $$ values listed for “Debt Held by the Public” and “Intergovernmental Holdings” only on the last business day of each month and not even all of them. For all other days those values are listed as “Not Available”.

On this special day, fiscal end-of-year, we can see from the amount and direction of the adjustment how fiscally responsible the federal government is.  From that we can surmise how government will perform in the future if left to its own devices.

The Grim Numbers From 2001 to 2010

The first thing you will notice is that in 2010 the national debt jumped big… by $96 billion on the last reporting day of September. You will also notice that between September 29, 2010 and October 5, 2010 that the ND went up by $158 billion. That is a HUGE amount in  just a few short days… far, far more than the current daily average of $3.8 billion/day.

Why did it jump so much? My guess… there are interest payments on the ND that come due. Last year the interest on the National Debt was $413 billion, greater than half the total Defense spending budget for the year .

If you look back all the way to 2001 you will see the same thing happens EVERY year right around the fiscal end of year.

For the last 10 years the ND had very large discontinuous jumps at the end of the fiscal year every year except 2003.

Here are the stats:
2010-$96 billion, 2009-$134 billion, 2008-$80 billion, 2007-$55 billion, 2006-$33 billion, 2005-$19 billion, 2004-$27 billion, 2003-$1 billion, 2002-$35 billion, and 2001-$26 billion.

It is also interesting to note that there are generally large increases in the ND in the date ranges immediately surrounding that special date. For example, in 2008 when the ND went up by ‘only’ $80 billion in ONE DAY it went up by a whopping $398 billion right around that date. Even during the ‘good’ year of 2003 the ND went up $34 billion right around the end of the fiscal year.

What will the jump be this year? You have my guess!

It is important to note that in 2001 the government had a surplus… it’s revenues exceeded it’s budget! That RARELY ever happens. You can find out just how rare by looking at “A History of Surpluses and Deficits in the United States 1940-present“.

It is even more important to note that because of interest payments on the National Debt that the ND actually INCREASED in 2001! The $26 billion increase in the ND on the last day of the fiscal year contributed to that.

Remember way back then when President Bill Clinton talked about paying off the National Debt by today? In case you’ve forgot, it is $14.7 trillion right now… $5 trillion of that from the Bush Administration in 8 years and $4 trillion from the Obama Administration in under 3 years.

Seems so long ago now, doesn’t it?

Conclusions

Politicians give lip service to balancing the budget and reducing our massive debt. But they get collective amnesia when it comes to doing anything about it.

Keynesian macroeconomics demands government deficit spend to kick start a down economy. The federal government has applied this economic philosophy on a very regular basis since The Depression of the 1930s. It is what President Obama is trying to do for the 2nd time in his presidency with the “American Jobs Act of 2011”.

However, for Keynesian macroeconomics to work you must somehow handle the acquired debt either through natural inflation reducing the value of acquired debt until it becomes manageable or through direct payments.

News flash! Government hasn’t been doing its job. $14.7 trillion is NOT manageable debt. The interest payments alone on it has prevented the ND from being reduced since 1956 even though we have had budget surpluses SEVEN years since then!

The last day of the federal government’s fiscal year is a barometer on how well we are handling our ginormous debt.

When you look later today you will see that it will have a substantial jump… $100 billion or more by my guesstimate.

The real question is:
Will we get serious about reducing our massive debt before its to late?

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About azleader

Learning to see life more clearly... one image at a time!

Posted on Oct 3, 2011, in Debt, Deficit, National Debt, Politics. Bookmark the permalink. 4 Comments.

  1. Very nice. Thanks for that link. I will use it often. To answer your last question, I think it is already too late. Europe is going to take us down with them before we can right our ship of state. In the end we will either save the bankers by printing money to pay off our debts or we ans every other country should repudiate our debts and start over again with hard currency. The first and most like option will lead to hyperinflation until the bankers come up with a new currency and we begin playing their credit game for another 50 or 100 years when the next collapse will happen or we screw the banks and accept deflation for six months or a year a then begin growing again on a solid foundation. The Austrian economist must be listened to or we will for ever be at the mercy of the banks.

  2. Sad to say, but hyperinflation is the best thing that could happen to help the federal government and indebted consumers and corporations to get their massive debts under control by diminishing the value of the debt itself and burying it in inflated dollars.

    The down side, of course, is that hyperinflation will also diminish the value of corporate cash reserves, stock values and wipe out the value of any actual wealth that ordinary citizens still have remaining.

    That would probably trigger a full depression.

  3. To Conservatives on Fire: We did it to ourselves. Bailing out Europe came as an afterthought. Blame US voter-sheelple.

  1. Pingback: A Day of Reckoning – A Follow Up « Inform The Pundits!

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