CNN reports that the US debt increased up to $14 trillion. It’s the highest level of debt in the country’s history. Besides, it means that USA has almost reached the debt ceiling, that calculates $14.294 trillion, and it’s the cap on the amount that can be borrowed by the federal government legally. In fact, the debt ceiling became the central point of the disputes concerning debt and spending. Actually, Republicans swear to affect spending cuts, although the leaders of Congress report that the cap will be heightened. According to the letter sent by the secretary of the Treasury Department, US debt can reach the “ceiling” in spring.
Geithner Tries To Protect US From Default
Well, Treasury takes particular measures to delay the breach from appearing. However, Geithner prompts the lawmakers to start acting sooner rather than later to heighten the cap, explaining that any postpone or failure can become a disaster for American economy and citizens. Though, it’s difficult to forecast what can happen as the debt ceiling has never been reached before, anyway, financial experts say that it won’t do any good in any case.
Some Important Facts
So, the Treasury Department won’t be able to borrow more funds if lawmakers fail to heighten the borrowing ceiling and US debt reaches it. Besides, if the strict policy will be set, America will have no ability to fund any programs and pay to its bondholders in full. It will happen due to the fact that country won’t be receiving enough tax income to manage all the bills. Moreover, financial analytics state that such consequences will be critical not only for the American economy, but for the whole world. In fact, current financial situation is not very inspiring and a lot of common people experience rather hard financial times and have to take short term loans to improve their living or solve some financial difficulties.