If you haven't already done so, please go at once to lewrockwell.com and read this piece by Ron Paul. Please pay particular attention to the penultimate (second last) paragraph.
We will quote the relevant sentence:
"The budget also contains a procedural rule that allows the debt limit to increase annually over the next ten years, almost doubling from the current $6.4 trillion to an incredible $12 trillion."
As of April 17, The Treasury's debt subject to limit page still lists the official debt ceiling at $US 6.4 TRILLION and the debt subject to limit at $US 6.399975 TRILLION. The latter figure has been frozen in place since February 20.
And here is a quote from a Reuters news article reporting the passage of the 2004 budget which appeared on April 11
"It (the budget) "projects government deficits of $347 billion in 2003, $385 billion in 2004 and $294 billion in 2005, all exceeding in dollar terms the previous record of $290 billion in 1992. It predicts an eventual return to surpluses by 2012 and a cumulative deficit of $1.4 trillion over the next decade.
OK, lets do some simple arithmetic. The total of the three projected budget deficits in the quote above is $US 1.022 TRILLION. There is a predicted "return to surplus" by 2012 and a predicted cumulative deficit of $US 1.4 TRILLION over the next decade. Almost exactly three-quarters of this predicted cumulative deficit are to be amassed in the first three years of the decade.
Ron Paul, by contrast, reports on a "procedural rule" which allows an annual increase to the debt limit over the next ten years which will result in a limit of $US 12.4 TRILLION. Incidentally, we have encountered no reporting of this "procedural rule" anywhere - except in this article by Mr Paul.
Here you have the "official" version, and the Ron Paul version. Don't forget, until less than two years ago, the "official" version was that Treasury debt would be paid off IN TOTAL by about 2012. Now, the "official" version is that budget surpluses will return in 2012. In the meantime, says the official version, cumulative deficits will reach $US 1.4 TRILLION over the next decade with three-quarters of it to be accumulated over the first three years. If this is the case, then why insert a procedure which raises the debt ceiling by $US 5.6 TRILLION - to $US 12 TRILLION - over the same period?
If this is true, and we have no reason whatsoever to doubt the veracity of Ron Paul and EVERY reason to doubt the "official" version, then the US Administration, abetted by the Congress, has embarked on a course of outright fiscal INSANITY!
If you have been wondering why the Europeans have been striving for more than a decade (first with the ECU and now successfully with the EURO) to establish their own currency independent of the US Dollar, wonder no more. If you have been wondering about the plans to introduce a Gold Dinar, wonder no more. If you are wondering why Brazil is planning a complete break with the IMF and why Argentina is planning to re-introduce Gold reserves as a backing for their currency, wonder no more.
And if you continue to wonder why Gold continues to languish, wonder no more.
From the sketchy reporting that has emerged about the passage of the 2004 budget on April 11, it would seem that the Republicans have pushed through a measure which would automatically hike the "debt limit" with each new budget. This measure would avoid either having to have a separate vote on the new limit or even having to put a figure on the size of the increase in the limit. There has been no specific figure attached to the debt limit hike which has gone through with the passage of this budget. Nor does the Treasury website yet have an update on the size of the limit.
All we know for sure, officially, is that the US government's deficit for March 2003 was $US 58.7 Billion and that the deficit for the first half of fiscal 2003 is $US 252 Billion, as compared with the $US 131.9 Billion in the equivalent period in fiscal 2002. We also know that the official increase in Treasury debt in 2002 was $US 421 Billion.
We are also as sure as we can be about anything which has yet to happen that long before the US reaches that projected "debt limit" of $US 12 TRILLION, the US Dollar will cease to exist as a viable world reserve currency. And at the current rate of spending increases, that won't take anything like ten years.