June 30, 2017

OTHER PEOPLE’S MONEY: Treasury to Run Out of Cash in Next 3 Months, Leading to Default or Delay of Payments.

On March 15, 2017, the suspension of the debt limit expired and since then the Treasury has been able to borrow additional funds without violating the debt ceiling.

“The Congressional Budget Office projects that if the debt limit remains unchanged, those measures will be exhausted and the Treasury will most likely run out of cash in early to mid-October,” the report states. “The government would then be unable to pay its obligations fully, so it would have to delay making payments for its programs and activities, default on its debt obligations, or both.”

The amount of money the government spends on programs and the amount it collects in taxes could change from the budget office projections, so the office warns that the Treasury could run out of funds even earlier.

Currently, the federal deficit stands at $693 billion, which is an increase of $134 billion than what it projected in January. The federal government has an outstanding debt of $19.8 trillion, which includes $14.3 trillion in public debt and $5.5 trillion held by government accounts.

That’s a nearly $700 billion deficit, absent a major war or economic downturn — and without serious entitlement reform, the situation only gets worse from here.

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