U.S. could hit debt ceiling by year's end
The U.S. government likely will hit its $16.4 trillion debt limit by year's end, giving more urgency to avoiding the fiscal cliff, the Treasury Department said.
Treasury officials said the country probably will reach its borrowing limit about the time Congress will be struggling with automatic tax hikes and draconian government spending cuts scheduled to go into effect Jan. 1, the Los Angeles Times reported Wednesday.
"It [the debt limit] adds to the cauldron of the dark brew," Mark Zandi, chief economist at Moody's Analytics, said, "that makes the disaster more disastrous."
The Congressional Budget Office and most economists predict 2013 will see another recession if nothing is done to prevent the convergence of tax increases and spending reductions known as the "fiscal cliff." Getting too close, or hitting, the debt ceiling likely would lead to another downgrade of the U.S. credit rating.
Posted by: Au Auric 2012-11-01