U.S. Treasury Department May Run Out of Cash in Fall if Debt Limits Not Raised

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The United States runs the risk that its Treasury Department will run out of cash and will not be able to honor its usual payments as of the first quarter of the next fiscal year of the country, which is to say immediately after next September, if the permissible limit of public debt, warned the Congressional Budget Office this Wednesday.

By June 30 of this year, the amount of the national debt reached 28.5 trillion dollars. A new limit is expected to be established on August 1, in accordance with the additional indebtedness accumulated until July 31.

If the current suspension of limits is not prolonged, or if legislators do not agree to a higher debt ceiling in the next few days, before August 1, the Treasury Department will have no more room for maneuver. To prevent debt from peaking, all you can do is take extraordinary measures that, along with cash inflows, allow you to finance government activities for a restricted period.

Those measures would include the possibility of suspending investments in certain funds, but the Congressional Budget Office estimates that once that option is exhausted, the Treasury Department will no longer be able to make payments, which could happen in as little as two or two. three months.

When that time comes, the imposed cap would either cause late payments for government activities or default on government debt obligations, and probably both.

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