Thu, Sep 19, 2013 - Page 15 News List

US has to cut US$2tn in 10 years: CBO

FISCAL DEBT DEBATE:The non-partisan group warned that US public debt would balloon to 100 percent of the nation’s economic output if officials do not take action


The extended higher debt levels would reduce economic growth, consume more revenues to pay interest, and increase the risk of a future financial crisis, the CBO said.

Should Congress fail to raise the debt limit, Elmendorf said that the US could begin defaulting on its obligations between the end of next month and the middle of November. He said that the Treasury Department’s own estimate that it will run out of borrowing capacity by the middle of next month, with a US$50 billion cash balance “seems plausible to us.”

That means Treasury will start to run short of cash to pay obligations starting around the end of next month, but the timing depends partly on the strength of revenue collection, he said.

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