Federal borrowing is on pace to hit the legal limit on the national debt in less than a week.
As set in a law passed by Congress and signed by President Barack Obama on Feb. 12, 2010, the legal limit on the national debt is $14.2940 trillion. As of the close of business Tuesday, according to the Daily Treasury Statement released at 4:00 pm today, the portion of the national debt subject to this legal limit was $14.268365 trillion. (The total national debt, including the portion exempted from the legal limit, was $14.3205 trillion.)
This left the U.S. Treasury with the authority to borrow only an additional $25.635 billion before it hits the statutory debt limit.
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The risk of miscalculation is high. That said, I would expect high tax receipts in this period.
What I want to know is what the machinations are that keeps the train on the track from may 16 till approx July 8th when we would be “technically” in default (rather like being technically pregnant)? Do we start shutting things down? What are the options that treasury has at its disposal. I haven’t seen details anywhere, maybe you have.
I have seen no details either, but I have not searched for them.
My default setting is that everything I hear in the news is hyperbole.
I suspect there are many options to avoid a default, but I might be terribly wrong.