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While the Imperial City is frozen in the Second Coming of Comey, it doesn't mean that the Washington spending machine is on pause. In fact, the Treasury's cash balance yesterday stood at only $153 billion — down by $130 billion just since the tax season peak was reached on April 25th.
Uncle Sam has been burning cash at a rate of $3.2 billion per calendar day since then and has no more room to borrow. That's because the public debt ceiling is frozen at its March 15th level ($19.808 trillion) and the mavens at the Treasury Building have run out of borrowing gimmicks.
The countdown to the mother of all debt ceiling crises is now well underway — with the nation's net debt sitting at $19.69 trillion. That figure, in turn, is up nearly $500 billion since FY 2016 ended on September 30 with the net debt at $19.22 trillion.
We itemize this torrent of red ink not merely to lament the nation's dire fiscal plight, but to document a practical point. It will be impossible to pay Uncle Sam's bills in full after Labor Day unless the debt ceiling is raised well the $20 trillion mark.
Exactly 36 years ago, Washington stood on another symbolic threshold — that is, raising the debt ceiling over the $1 trillion markfor the first time.
Back in October 1981, however, the Gipper was in the Oval Office at the peak of his popularity. He got the debt ceiling over the symbolic barrier at that time because he could still credibly promise that the budget would be balanced within three years. That was after his already enacted tax cuts became fully effective and the already enacted spending reductions took hold.