Are We Broke Yet?
Two simple graphs, updated daily, that show exactly how screwed the federal government's finances really are.
By Chris WilsonUpdated Tuesday, July 26, 2011, at 10:12 AM ETHere's one way to express how catastrophically screwed the U.S. government's finances are: If the entire U.S budget were cut to zero, effective immediately—the military, all entitlements, the electricity bill for the Capitol—there still wouldn't be enough money to cover the payments on old debt that come due every day. In fact, by
Slate's calculations, the payments would have dried us up in under a month. So for decades the strategy has been to borrow new money to pay down old debt—plus a little extra to kick to the Treasury's coffers, since we habitually spend more than we take in. That continued to work this year until May 16, when we
maxed out our congressional credit card. Since then, the Treasury has been living on savings and whatever revenue comes in. The first graph here very simply shows the balance in the Treasury's bank account, which is published
every weekday. The light-colored bars at the end represent the
Bipartisan Policy Center's projections for how long we can make it before the money all dries up. That date is Aug. 3.
Update, July 26, 10:12 a.m.: The most recent Treasury statement, for July 22, reports a balance of $84.4 billion, slightly below projections. Funds are still on track to run dry on Wednesday, Aug. 3.
Below it is a graph of the total national debt. Note that the scale begins at $13.5 trillion, not zero.
0100200300400Cash in the Treasury's Bank Account(in billions)Oct2010NovDecJan2011FebMarAprMayJunJul
As you can see, as the debt approaches the point of no return, the U.S. coffers take a major hit. But you will also see some spikes in revenue after borrowing is maxed out. This can be attributed to many things—an influx of tax revenue, profits from the Federal Reserve's holdings, and the general movement of funds and debt between accounts. We are continuing to borrow money as well, but only in equal amounts to the debt we pay off, so as to remain under the debt ceiling.
13.51414.5Total National Debt(in trillions)Oct2010NovDecJan2011FebMarAprMayJunJul
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