Study warns of US debt problems
The United States government could run out of money to pay its bills in full and on time by next month, a new study warns.
A study by the Congressional Budget Office released on Tuesday shows that the US government could default by October if lawmakers fail to increase the $16.7 trillion borrowing cap.
The Treasury Department’s assessment that it’ll run out of borrowing authority and have just $50 billion cash on hand in mid-October “sounds plausible,” said CBO Director Doug Elmendorf.
Treasury Secretary Jacob Lew also warned on Tuesday that Congress needs to act to increase the debt limit by mid-October.
“Efforts to either defund or delay the Affordable Care Act are unacceptable,” Lew told the Economic Club of Washington. “That is not a path towards something that can ultimately be signed into law.”
The report is one of a series by the agency and other budget watchdogs warning that spiraling long-term debt threatens to reduce private investment, raise interest rates, and limit Washington’s ability to respond to a financial crisis.
The US government has about $16.7 trillion in debt which continues to rise because the government spends more money than it brings in.
The government spends more than $3.5 trillion a year on a variety of things, including Social Security benefits, road projects, the military and foreign aid.
In 2011, Standard & Poor™s downgraded the US credit rating after President Obama and Congress failed to resolve the long-term debt crisis.
AHT/ARA
Copyright: Press TV
Source: http://rinf.com/alt-news/breaking-news/study-warns-of-us-debt-problems/70643/
