A Letter from Treasury Secretary Timothy Geithner:
April 4, 2011
The Honorable Harry Reid
Democratic Leader
United States Senate
Washington, DC 20510
Dear Mr. Leader:
I am writing to update you on the Treasury Department’s projections regarding when the statutory debt limit will be reached and to inform you about the limits of the available measures at our disposal to delay that date temporarily.
In our previous communications to Congress, we provided regular estimates of the likely time period in which the debt limit could be reached. We can now make that projection with more precision. The Treasury Department now projects that the debt limit will be reached no later than May 16, 2011. This is a projection based on the expected level of tax receipts, the timing of our commitments and obligations over the next several weeks, and our judgment concerning the level of cash balances we need to operate. Although these projections could change, we do not believe they are likely to change in a way that would give Congress more time in which to act. Treasury will provide an update of this projection in early May.
If the debt limit is not increased by May 16, the Treasury Department has authority to take certain extraordinary measures, described in detail in the appendix, to temporarily postpone the date that the United States would otherwise default on its obligations. These actions, which have been employed during previous debt limit impasses, would be exhausted after approximately eight weeks, meaning no headroom to borrow within the limit would be available after about July 8, 2011. At that point the Treasury would have no remaining borrowing authority, and the available cash balances would be inadequate for us to operate with a sufficient margin to meet our commitments securely....
Why does this matter? Because our country must pay the debts it incurs. And right now, our Federal government is spending 3 dollars for every 2 dollars it brings in. The Federal deficit for the current fiscal year (which ends Sept 30th) will be 1.7 trillion dollars! This is the government's own estimate. The deficit estimate for the upcoming fiscal year is also over a trillion dollars. The deficit is the amount above and beyond what the budget allows. Above and beyond. This is money the government has to borrow and YOU and I have to help pay back.
And who receives these borrowed funds? Hmmm... It's not you or me, is it? Think bank bailouts. Bailouts of banks that are "too big to fail." Wall street barons. Think bonuses for the employees of the big banks (they amount to billions--and YOU and I are paying for this, plus interest).
And here's the kicker. The interest on these borrowed funds, plus interest on money we've been borrowing for years, plus our government's obligations to Social Security recipients and Medicare recipients, plus our regular expenditures (that include about half a trillion dollars a year to the military-industrial complex) will exceed federal government revenues unless we raise the debt ceiling, which is an amount set by law.
Thus the letter from Secretary Geithner.
Republican or Democrat, Obama lover or birther, patriot or rebel, YOU and I are getting royally FUCKED in the ass by our government: a government that has become a government of the rich, by the rich, and for the rich.
And by the time the U.S. dollar crashes--and because we keep borrowing trillions of dollars to pay for bailouts and military ventures it has to crash--YOU and I will be left holding the bag after the rich have bought up all the gold and silver and strong foreign currencies out there. This is how they will survive, even profit from, the crash.
This will amount to the greatest transfer of wealth in history. Your dollars won't be worth the paper they're printed on.
And OUR government is doing this to YOU and me.
Woo hoo!
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