And so the US debt ceiling of $16.394 trillion is now just $63 billion away.
Furthermore, once Thursday’s Bill auction adds another $26 billion in net debt, the ceiling will be a tiny $40 billion off, or just one week’s worth of net debt issuance away, which is why the Treasury just warned the debt ceiling will be breached in a few weeks. At that point, just like in August 2011, the Treasury will have no choice but to start raiding the G-fund, and other sundry government retirement funds, until such time in February or latest March, when the debt ceiling debate, and hike, can be no longer postponed.
Most importantly, since the debt ceiling is still in place, all wishes by Timmy G and other believes in Magic Money Trees notwithstanding, this is the one true deadline to get a joint Fiscal Cliff-cum-debt ceiling deal done. Which also means that despite all hopes to the contrary, it is now a virtual certainty that the US will enter 2013 without a Fiscal deal done, and will delay until the last possible moment, when America will have to once again add $2-3, maybe more, trillion to its debt ceiling, probably taking it as high as $21 trillion, which is where it will be by the time America will be preparing to usher in the next Wall Street pawn also known in polite circles as “president.”
Below is a chart of US debt/GDP under the current adnimistration: