As noted in the post below, the past few months have actually seen a very, very, very slight improvement in the national debt. So how did that happen?
According to U.S. Treasury figures at Debt to the Penny, the Total Public Debt Outstanding has actually shrunk from $14,345,537,505,802.45 on May 16 to $14,342,898,467,069.07 on July 19.
That’s $2,639,038,733.38 smaller, or a reduction of $2.63 billion.
During that time, the debt held by the public — regular old borrowing from anybody willing to lend to Uncle Sam, foreign or domestic — actually increased, from $9,717,694,227,528.65 to $9,753,904,328,297.12.
That’s an increase of $36,210,100,768.47, or $36.2 billion.
So how did the total debt shrink? Because the numbers improved in the category of intergovernmental holdings — money the government owes to itself, i.e., the Social Security Trust Fund. (You know that when you pay into Social Security, the money doesn’t actually go into any “trust fund” or Al Gore’s “lockbox.” The government takes that money and spends it, and writes itself an IOU to be paid back later. This is how one government account can owe another government account money.)
The national debt in the category of “intragovernmental holdings” shrank from $4,627,843,278,273.80 on May 16 to $4,588,994,138,771.95.
That’s a reduction of $38,849,139,501.85, or $38.8 billion.
The $38.8 billion improvement in one category of debt is greater than the $36.2 billion worsening in the other, thus the $2.63 billion knocked off the $14.3 trillion debt.
So what changed in May?
The federal government will start using “extraordinary measures” this week to juggle its finances to avoid hitting the nation’s debt limit this month, Treasury Secretary Timothy F. Geithner told congressional leaders.
Starting Friday, the Treasury will stop issuing State and Local Government Series securities, which count against the debt limit. The securities are used by governments to manage their expenses on tax-exempt bonds, and the move will deprive them of “an important tool,” Geithner said.
Geithner said that on May 16, he would suspend issuing new federal debt for the Civil Service Retirement and Disability Fund, which would allow Treasury securities held by the fund to be redeemed. The government also would suspend the daily reinvestment of securities held by the investment fund for the Federal Employees Retirement System’s Thrift Savings Plan.
Geithner may not like those “extraordinary measures,” but they’re actually getting the numbers moving in the right direction. It’s like watching an obese man skip his first dessert and do his first bit of exercise and see the slightest of improvements in his weight.
And you thought all of this posturing and all the hardline stances were bad for America’s financial future!
The Debt Ceiling Debate: Already helping America’s bottom line!