U.S. Debt Rockets Up $339 Billion In A Single Day

On Monday, the United States national debt increased $339 billion.

In one day. Just like that.

What caused the sudden spike?

That same day, President Obama signed a bill into law suspending the debt ceiling until March 15, 2017. That allows the government to once again borrow, free from the constraints of an $18.1 trillion ceiling.

As USA Today reports, the bill not only suspended the debt ceiling, it also set the federal budget for fiscal years 2016 and 2017, and lifted budget caps to boost spending for military and domestic programs by a total of $80 billion over two years.

From a political standpoint, the budget deal avoided a showdown between Obama and Republicans on the debt ceiling and erased the threat of a government shutdown – at least for the next two years.

In other words, Congress and the president kicked the can down the road.

“It is a signal of how Washington should work,” Obama said.

Free of its constraints, the federal government immediately set about piling on some more debt. According to a website that tracks the debt, the US government owed $18.153 trillion last Friday. On Monday, the number stood at a cool $18.492 trillion.

The sudden increase has to do with what are known as “extraordinary measures” that keep the government afloat once it hits the debt ceiling. These include delaying issuance of certain debt instruments, suspending investments in federal employee pension funds, a moratorium on deposits from state and local governments, and drawing down a $23 billion currency stabilization fund.

According to the Washington Examiner, the Bipartisan Policy Center estimated that the government had somewhere around $370 billion worth of extraordinary measures to use once it butted up against the $18.1 trillion ceiling earlier this year.

Extraordinary measures allow the government to limp along temporarily. Once the cap is lifted, the government scrambles to mitigate the effects of the extraordinary measure, and viola – massive, virtually instantaneous debt increase.