Debt Limit Reached - The American Spectator | USA News and Politics
Debt Limit Reached
by

Treasury Secretary Tim Geithner announced earlier today that the government has reached the debt ceiling, and that the Treasury was entering a “debt issuance suspension period.” In other words, the Treasury cannot legally auction any more bonds. 

Until Congress votes to increase the debt ceiling, the Treasury has to prioritize spending. Geithner’s first action will be to suspend payments to Civil Service Retirement and Disability Fund and the Government Securities Investment Fund (“G Fund”). The practical effects of these measures will be very slight — both of the funds will be made whole once the debt issuance suspension period has ended. 

In fact, Bush Treasury secretary John Snow took the same steps during the most recent debt limit impasse. By suspending payments to the CSRDF and the G Fund, in addition to taking funds from the Treasury’s Exchange Stabilization Fund (kept for emergency interventions into foreign exchange markets), the Treasury was able to maintain the government’s activities without any trouble from February 20 to May 27, 2003. 

Similarly, when the government reached the debt limit today, the bond markets took no notice. And if they had already priced in the near-inevitability that the debt limit would be reached, that price was a very low one.

There are a number of remaining measures for the Treasury to take before the real dire options, such as withholding Social Security checks or military paychecks — become possibilities.

Sign Up to receive Our Latest Updates! Register

Notice to Readers: The American Spectator and Spectator World are marks used by independent publishing companies that are not affiliated in any way. If you are looking for The Spectator World please click on the following link: https://spectatorworld.com/.

Be a Free Market Loving Patriot. Subscribe Today!

Stop the Inflation Grinch From Stealing Christmas!

That’s right, the Grinch (Joe Biden) is coming for your pocketbooks this Christmas season with record inflation. Just to recap, here is a list of items that have gone up during his reign. 

Gas: 40%+
Beef: 20%+
Used Cars: 20%+
Lodging: 17%
Eggs: 13%

What hasn’t increased? The cost to subscribe to The American Spectator! For a limited time, we are offering our popular yearly subscription for only $49.99. Lock in the lowest price of the year by subscribing today

The Grinch Stole Christmas Sale
Commander-in-chief of Christmas inflation