WASHINGTON DC – The United States will not be able to pay its bills from the second half of this year unless Congress raises the amount the government can borrow, the Treasury Department warned Wednesday.
“Based on currently available information, Treasury expects that extraordinary measures will be exhausted sometime in the second half of 2019,” Deputy Assistance Secretary Brian Smit said in the agency’s Quarterly Refunding Statement.
Smit added that it was critical that “Congress act to increase the nation’s borrowing authority, and Treasury urges Congress to act promptly on this important matter.”
“Extraordinary measures” refers to steps taken by the Treasury to keep the government running since 1 March, when a law suspending the US debt limit expired, the statement said.
Earlier, government shutdowns resulted from when the Treasury exhausted its lending authority and party disputes in Congress impeded the necessary legislation to increase the US debt ceiling.
The US Congressional Budget Office (CBO) presented a chart of the US public debt dynamics in which it shows its accelerated growth.
According to the prognosis, the forecast for 2029 is for the index to reach 93% of annual GDP and, by 2049, to rise to 150% – a figure never seen before.
The possible explanation for this is that this predictable steady growth in public debt is due to the persistence of large deficits, while the debt spiral goes well beyond the $22 trillion base value of government debt.
In March 2018, the US Federal Reserve (Fed) administration estimated that all sectors’ indebtedness, including bonds, loans and intergovernmental bonds, exceeded $72 trillion.
This huge amount divided by the number of US inhabitants (329 million, according to the national census), would amount to almost US $ 220 thousand per person.
The US Treasury, the federal states, and the financial sector have been borrowing at a dizzying pace over the last 40 years, with special emphasis around 2008 when the global financial crisis began.
Gross debt rose from $5 trillion at the beginning of Ronald Reagan’s presidency to $29 trillion when George W. Bush took office. Meanwhile, during the crisis, the value almost doubled to $54 trillion, and since then increased by $18 trillion.
The Treasury Department will have to take extraordinary measures to prevent the country from failing to meet the next debt ceiling in late September or early October.