Late Wednesday night Congress approved legislation to fund the workings of government until January 15 and to raise the debt ceiling which allows the Treasury Department to borrow money to pay everything until February 7.
Almost every aspect of the federal government went back into active mode yesterday. In less than 48 hours the federal debt jumped $328 billion. That alone is sad, but more significantly, today the debt rose above $17 trillion for the first time.
There is a reasonable explanation for the quick 2-day rise in the debt. The US hit its debt limit in May, and the Treasury Department has been borrowing from various government funds to pay the obligations. As soon as Congress approved a higher credit limit, Treasury racked up more debt to put money back into the funds they had depleted.
That is understandable, but does not explain why the US continues to approve expenditures that must be paid for with borrowed money. $7 trillion of the debt total has been added during Barak Obama’s presidency. We crossed the $16 trillion mark only 13 months ago (Sept. 2012). The Federal Reserve is manipulating the flow of money and interest rates in the US, so average Americans are not getting an accurate picture of the economy. If government spending and the federal debt are not cut (slowly and wisely), we can look forward to high inflation when the Fed removes their hand or possibly a major revaluing of our currency.