US Debt Limit – 1 Week Left

In one week today the world’s biggest economy cannot pay its bills if Congress does not approve yet another higher debt limit.  We reported in the Weekly Wrap back in March 2015 when the US hit their current debt limit of $18.1 trillion, and since then they have survived on ‘emergency cash funding’ / accounting games leaving no more avenues come Tuesday next week but to simply borrow more for their continual budget deficits (spending more than income).

GOP’s John Boehner expects a new limit of $19.6 trillion with a review in March 2017 to be tabled.  The graph below puts this latest figure into perspective.  That perspective of course is an exponential rise in debt as the Ponzi scheme accelerates in its final throes. 

US Treasurer Jack Lew warned yesterday of the consequences should we see the games of 2013 replayed, and that doing so could result in an accident "that would be terrible."  In 2013 the US Government shut down for 16 days resulting in a 0.3 impact on GDP and accompanying employment.  The problem, as Lew alludes, is this times it’s potentially much worse.  The cartoon below sums up this farcical situation…