Lawmakers told $2 trillion debt cap raise needed: sources

[stockholmer]

Source: Reuters

"(Reuters) - The Treasury has told lawmakers a roughly $2 trillion increase in the legal limit on U.S. federal debt was needed to ensure the government can keep borrowing through the 2012 presidential election, sources with knowledge of the discussions said.

Obama administration officials have repeatedly said that it is up to Congress to decide how much the $14.3 trillion debt limit should be raised.

But when lawmakers asked how much of an increase would be needed to meet the government's obligations into early 2013, Treasury officials floated the $2 trillion figure, Senate and administration sources told Reuters......................................"

snip

Read more: http://www.reuters.com/article/2011/05/04/us-usa-budget-limit-idUSTRE7434UG20110504

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http://www.zerohedge.com/article/us-treasury-tells-lawmakers-it-needs-2-trillion-debt-capacity

"Reuters reports that the US Treasury has informed lawmakers it needs a $2 trillion debt limit increase to operate... until the end of 2012. Better stated, this is 112% of US GDP (which will soon be declining). This is precisely as Zero Hedge speculated. We hope PIMCO will be swayed soon enough to buy all this extra debt about to start coming down Geithner's conveyor chute. But yes, the Fed will most certainly not be needed to monetize this extra debt: Japan, Europe and Libya have it covered. That said, we don't know if Libyan rebels will have the capacity to monetize the $3 trillion in debt in 2013, $4 trillion in 2014, and so forth. The pattern is clear."

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to clear up confusion, the 112% of GDP mentioned above refers to new total US debt of $16.3 trillion.

[Poll_Blind]

1. I love this country, but I really need to get the hell out of it.

This is insane and everybody damn well knows it.

PB

[dixiegrrrrl]

2. Translation: Treasury once again admits USA is bankrupt.

Yet, strangely, it gave all our money to banks all over the world.

Every time Timmy admits we have to raise the bar on our debt, the dollar plunges, essential commodities go up in price, ( ie: inflation) and the T-bills become radioactive to investors.
Even people who pay little attention to the economy can understand what a debt spiral is by now.