US Gross National Debt Spikes by $640 billion in 8 Weeks

by Wolf Richter, Wolf Street:

But the debt-ceiling charade is back.

The debt ceiling charade being played out every few years in Congress makes the entire world shake its collective head and pray that Congress will for the umpteenth time raise the dang thing or at least “suspend” it. The other option is a US default, the global consequences of which are too ugly to imagine, even for Congress.

In its infinite wisdom, Congress didn’t raise the debt ceiling in September; it only suspended it through December 8, after which the horse-trading will start all over again. But Congress is busy listening to lobbyists about the tax cuts – who gets them and who pays for them – and the debt ceiling isn’t even on the back burner. So here we go again.

But this charade has some peculiar effects, beyond its entertainment value: For months on end, it covers up the true extent of US government debt, and its continued surge. Then suddenly, the floodgates open.

Over just these six years, the debt has ballooned by $5.7 trillion, or 39%, from $14.8 trillion to $20.5 trillion. In the chart below, note the last three debt-ceiling fights, the long flat lines in 2013, 2015, and 2017, followed each time by an enormous spike when the debt ceiling was lifted or suspended, and when the “extraordinary measures” with which the Treasury keeps the government afloat were reversed.

The current post-debt-ceiling spike has reached $640 billion and continues to surge:

US-Gross-National-Debt-2011-2017-11-02.png

The last three debt ceiling spikes:

  • On October 17, 2013, the day after the debt ceiling was raised, gross national debt jumped $328 billion and then continued to surge. By November 25, it had jumped by $464 billion to $17.2 billion
  • On November 2, 2015, the day after the debt ceiling was raised, gross national debt jumped $340 billion and then continued to surge. By the end of November, it had spiked by $650 billion to $18.8 billion.
  • On September 8, 2017, the day after the debt ceiling was “suspended,” gross national debt jumped by $329 billion, and by now has spiked by $640 billion to $20.5 trillion. This spike is somewhat lower than my estimate on August 21 of an $800-billion spike, but it’s not through spiking yet either.

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