one can only hope……
US government warns it’s running out of cash
Treasury Secretary John Snow has warned that unless Congress raises the national debt limit, the US government will run out of cash to finance its daily work in two months.
In a letter to Senate leaders Thursday, Snow said the statutory debt limit imposed by Congress of 8.184 trillion dollars would be reached in mid-February and the government would then lose its borrowing power.
“At that time, unless the debt limit is raised or the Treasury Department takes authorized extraordinary actions, we will be unable to continue to finance government operations,” said the letter, seen by AFP.
Snow warned that even if the Treasury took “all available prudent and legal actions” to avoid breaching the ceiling, “we anticipate that we can finance government operations no longer than mid-March”.
“Accordingly, I am writing to request that Congress raise the statutory debt limit as soon as possible.”
The Republican-led Congress last voted to increase the debt limit in mid-November 2004, despite opposition from Democrats who demanded the free-spending federal government tighten its belt instead.
The US debt limit sparked bitter partisan battles in the mid-1990s between a Republican-dominated Congress and the Democratic administration of president Bill Clinton, leading to shutdowns of the federal government.
Once the US government hits the ceiling, it comes under threat of defaulting on its debts and can lose the ability to raise future credit on the capital markets.
Snow underlined that the “full faith and credit of the United States” was a unique selling point on the markets.
“A failure to increase the debt limit in a timely manner would threaten this unique and important position,” he wrote in his letter.
