[b]Unprecedented National Debt Default Averted: Temporarily [/b]

Income Taxes Help U.S. Treasury

By Leigh Strope
Associated Press Writer
Wednesday, April 17, 2002; 11:25 AM

WASHINGTON –– A flood of income tax payments has helped ease pressure on the national debt ceiling and allowed the Treasury Department to begin restoring money shifted out of government employee pension accounts last month [b]to avert an unprecedented government default[/b], officials said Wednesday.

The Bush administration also continued to press a deadlocked Congress, which has avoided an election-year vote to extend the government's authority to borrow, to act [b]because the $5.95 trillion debt limit could be hit this summer. [/b]

[b]"The need to raise the debt ceiling has only been postponed,"[/b] Treasury Secretary Paul O'Neill said in a Wednesday letter to Senate Majority Leader Tom Daschle. The Bush administration wants a $750 billion increase.

O'Neill earlier this month moved federal retirement funds into a non-interest-bearing account to free room for more borrowing. The juggling of federal retirement accounts has been done before in standoffs with Congress and has no effect on employees' retirement funds.

The money was moved back Tuesday and interest paid after income tax payments began flowing into Treasury coffers after Monday's tax deadline.

[b]Without the shifting of funds, the government would have been technically in default on the debt – which has never happened in the country's history.[/b] That would cast a cloud over U.S. securities, which are considered the world's safest investment. It also would mean the government would be forced to pay billions of dollars in higher interest payments on the national debt in future years.

The debt limit issue is more about politics than economics.

Some Democrats want to use the issue in November's election to help drive home their message that President Bush's $1.35 trillion, 10-year tax cut last year was too generous and has pushed the country back into deficit spending.

Republicans who control the House have lacked the votes to pass legislation increasing the debt limit because of opposition from conservatives, who are leery that it will lead to more spending.

© 2002 The Associated Press
[b]
[URL=http://www.survivalforum.com/modules.php?name=News&file=article&sid=304]April 17th Story and Your Comments here[/URL]

[URL=http://www.survivalforum.com/modules.php?name=News&file=article&sid=199]April 3rd Story - US National Debt Default - and your comments here[/URL][/b]

Another instesting thing that was reported today:

S&P downgrades Japan's credit standing to same level as Malta's


Franklin
[URL=http://www.survivalforum.com]SurvivalForum[/URL]

It is interesting indeed...

Its something that we should really keep our eye on...

There is apparently large Fortune 500 companies as well that have a lot of debt coming due in which there is no cash...

Besides everything else that is going on, this economy and issues (debt, etc) may be something to be very concerned about.

Franklin

It has already been hit.  From the US Treasury:

[url]http://www.publicdebt.treas.gov/opd/opdpenny.htm[/url]

The Debt To the Penny
   Current                Amount

 04/16/2002        $6,009,070,654,503.89


  Current
   Month

 04/15/2002        $6,020,720,533,307.05
 04/12/2002        $6,020,864,443,381.79
 04/11/2002        $6,020,911,043,558.80
 04/10/2002        $6,020,735,519,021.84
 04/09/2002        $6,020,784,790,058.45
 04/08/2002        $6,020,831,299,342.10
 04/05/2002        $6,020,970,857,706.62
 04/04/2002        $6,021,017,363,339.55
 04/03/2002        $6,014,197,668,665.29
 04/02/2002        $6,005,511,463,777.25
 04/01/2002        $5,999,311,790,413.49

Excellent post 357mag...

It has been hit (debt limit)

I tell you what...this is very concerning due to the fact that there are 1300 MAJOR corporations that have the same problem right now...

Ratios cash to debt of just 19CENTS on the dollar!

IBM and some others have debt due this year in which there is NO MONEY

Franklin
[url=http://www.survivalforum.com]SurvivalForum[/url]

I wish the crash would happen already. I am getting tired of being the only one around here that is unemployed.

What type of work is it that you do/did?

Franklin

[img]www.brillig.com/debt_clock/debtc.gif[/img]

Do people really believe that this house of cards will not fall?

Do people really believe that if you build your house on a foundation of sand and a storm comes that the house will not fall?

Take a good look at the above number!

That is totally ridiculous!

Where is the money going that is being collected from the citizens? How can you collect all that money and still pile up that kind of debt?

Franklin
[url=http://www.survivalforum.com]SurvivalForum[/url]

What in the hell happened to the Arizona law where they would secede from the union when the debt reached $6 trill?

Someone get the damn ball rolling.