Economic Outlook: US debt: a ticking timebomb

Jonas Crosland

Economic Outlook: US debt: a ticking timebomb

President Donald Trump has shown his ability to ruffle more than a few feathers, but when it comes to taking on economic reality he is likely to come a poor second. The issue comes in the form of the budget deficit that in March reached the debt ceiling as set by Congress. At the moment that stands at $19,800,000,000,000m or $19.8 trillion for short, and that limit has already been touched this March. Since then, the Treasury has been muddling through using so-called extraordinary measures. These can cause damage because such cash management operations include suspending investments in pension funds for federal workers. And time is running out; it may only be a couple of weeks before the shutters come down with the end of the financial year on 30 September. Given that the Republicans have control of the White House and Congress; this shouldn’t be a problem under normal circumstances. But the administration’s inability to get legislation onto the statute book tends to suggest that it may not be plain sailing lifting the debt ceiling.

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