Rule By Outlaws

12/17/09 Baltimore, Maryland – Technically speaking, the U.S. government is now illegitimate.

Not in the way most people use that word… like describing the product of a lonely housewife and the mailman, or as a synonym for illogical. But we mean, as Webster’s puts it, “not sanctioned by law: illegal.”

Yesterday the national debt, as reported by the Treasury, reached $12.13 trillion. Rest assured, it’s even higher by now. The official debt ceiling — a rule of law which the government must obey, lest it render all other laws illegitimate — currently does not allow the national debt to exceed $12.10 trillion.

Viva la revolucion!

If our system of government weren’t a laughable mess of loopholes and earmarks, this would be a problem. But you can sleep easy… an unnamed Treasury official told CBS News that government has some “extraordinary accounting tools” at its disposal to move the official national debt up or down $150 billion. This has happened before, we’re assured, so it’s no big deal.

Still, the typical homo sapiens response to this kind of dilemma might be to cool off debt accumulation, if only for a little while. Heh… yeah right:

The American government has approved almost $1.8 trillion in new spending in the last 24 hours. It’s a sad day when we have to bullet point one day’s worth of Uncle Sam’s tab… but here we go:

• President Obama signed into law a 1,000-page, $1.1 trillion spending bill. The bill encompasses six of the 12 appropriations bills for the fiscal year 2010, including:

• $447 billion for operating budgets of various government agencies… the mind-boggling expense of “keeping the lights on” for the federal government

• $650 billion for Medicare and Medicaid payouts

• And about $4 billion for more than 5,000 local projects and earmarks. (The gears of American legislature don’t grease themselves, if you know what I mean.)

• The House approved the $636 billion defense budget yesterday. Evidently, it was too massive and complicated to be fit into the spending bill Mr. Obama signed.

• The House also passed a $154 billion “jobs bill.” House Democrats, the sole supporters of the bill, aim to pump up the populism for the 2010 elections by throwing some billions at new infrastructure, state aid and funding for “safety net programs.”

Also earmarked in that House “jobs bill” is legislation to raise the debt ceiling to $12.39 — not because Nancy Pelosi and her brood actually give a s$*t, but probably because it will entice Senate Republicans to push it through. Incredible, these people…

Ian Mathias

Ian Mathias is the managing editor of Agora Financial’s Income Franchise, where he writes and researches about retirement, dividend and fixed income investing. Much of his work is featured in The Daily Reckoning and Lifetime Income Report – Agora Financial’s flagship income investing advisory.  

Previously, Ian managed The 5 Min. Forecast, a fun, fast-paced daily look into the future of global markets and macroeconomics. He’s also worked in public relations, where media outlets like Forbes, AP, Yahoo! and MSN Money have syndicated his writing. If he’s not at work, you’ll probably find Ian on a bicycle, racing up and down the “mountains” of Baltimore County. Ian has a BA from Loyola University in Maryland. 

View articles by Ian Mathias

Related Articles:

• November 28, 2011 -- Tracking the Government’s Plans to Save the Economy
• August 16, 2011 -- Saving the US Economy by Presidential Decree
• January 26, 2011 -- The Politics of Finance
• July 22, 2010 -- Public Debt Replaces Private Debt in the Name of Progress
• June 17, 2010 -- No Quick Recovery for the US Economy

 Print This Post