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jakeXT

(10,575 posts) Fri Feb 7, 2014, 04:59 PM Feb 2014

Treasury pulls back as U.S. hits debt limit again

Source: USA Today

WASHINGTON – The Treasury Department stopped issuing securities to state and local governments at noon Friday, instituting the first of what will likely be several steps to stay under the debt limit enacted by Congress.

Under the budget deal passed by Congress last November, the debt limit was temporarily suspended -- but only through Friday. Beginning Saturday, the debt limit will be reset to its current level, about $17.2 trillion.

Congress has voted to raise the debt ceiling three times since 2011. But it's missed the deadline each time, forcing the Treasury Department to use what it calls "extraordinary measures" to avoid hitting the debt ceiling.

The first of those measures is to stop accepting deposits from state and local governments, which often need a short-term place to park their proceeds from issuing bonds. Those are called State and Local Government Series bonds, or SLGS.

Read more: http://www.usatoday.com/story/news/politics/2014/02/07/treasury-debt-limit-extraordinary-measures/5278153/

7 replies

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Highlight:

Treasury pulls back as U.S. hits debt limit again (Original Post) jakeXT Feb 2014 OP

If Men from Mars are watching I wonder what they're saying. C0RYH0FFMAN Feb 2014 #1

Reminds again of the Grayson idea jakeXT Feb 2014 #2

it would also force the federal reserve to become insolvent bossy22 Feb 2014 #4

The saying goes like this: "the dollar is our currency, but your problem." jakeXT Feb 2014 #6

What's with the zeros in your name? eggplant Feb 2014 #3

I wonder if clouds ever look down on us and say... progree Feb 2014 #5

is the whole purpose of debt/budget fighting to enable certain players to short stocks Herself Feb 2014 #7

C0RYH0FFMAN

(20 posts)

1. If Men from Mars are watching I wonder what they're saying.

Reply to jakeXT (Original post)

Fri Feb 7, 2014, 05:25 PM

Feb 2014

A "Ceiling" on the number of treasury securities we can issue is so silly. They are the safest savings accounts in the world. They take money out of banks that can go bankrupt and put it into accounts at the FED which can never go bankrupt.

CoryHoffmanForCongress.com

@C0RYH0FFMAN

jakeXT

(10,575 posts)

2. Reminds again of the Grayson idea

Reply to C0RYH0FFMAN (Reply #1)

Fri Feb 7, 2014, 06:08 PM

Feb 2014

So a simple solution to the impasse is as follows: Federal Reserve Chairman Ben Bernanke should simply cancel the Treasury debt that it owns. The government can just forgive the government’s debt.

This wouldn’t solve the debt problem entirely. The Federal Reserve doesn’t own all U.S. government debt; it owns only roughly $2 trillion of it. (Well $2,076,927,000,000.00, as of last Wednesday, but who’s counting?)

Yet canceling this debt would give the government substantial room under the debt ceiling to manage its finances. It would end the debt ceiling standoff in Congress, and it would prevent a default.

http://blogs.reuters.com/great-debate/2013/10/09/ending-the-debt-limit-crisis-dear-ben-bernanke/

bossy22

(3,547 posts)

4. it would also force the federal reserve to become insolvent

Reply to jakeXT (Reply #2)

Fri Feb 7, 2014, 10:59 PM

Feb 2014

It's liabilities would then far exceed it's assets. The fed's ability to control the money supply would be destroyed overnight. The article down plays how much treasuries are used to control the money supply- at this moment they are the main asset backing up the u.s. money supply.

It is by far a terrible idea. I'm quite surprised it is coming out of alan grayson's mouth. He has gone down significantly in my book for these ideas.

jakeXT

(10,575 posts)

6. The saying goes like this: "the dollar is our currency, but your problem."

Reply to bossy22 (Reply #4)

Sat Feb 8, 2014, 05:44 AM

Feb 2014

Shortly after taking the Treasury post, Connally famously told a group of European finance ministers worried about the export of American inflation that the dollar "is our currency, but your problem."[17]

http://en.m.wikipedia.org/wiki/John_Connally