With the financial system in chaos, it’s easy to see why the US is worried about the impact of the debt ceiling.
In a report published Tuesday by the nonpartisan Congressional Budget Office, the CBO estimates that the government would owe $10.4 trillion if Congress doesn’t raise the debt limit by midnight on Thursday.
The government would be forced to borrow another $1.6 trillion more.
The problem, according to CBO director Douglas Elmendorf, is that the country is actually doing a lot better than it’s supposed to.
“It is actually the economy that is doing better,” Elmendorff said during a press briefing Tuesday.
“If we don’t act now, we’re going to have to raise the money that is already outstanding, which means that the Treasury is going to be borrowing a lot more money than it is able to borrow.”
It’s worth noting that the CBO did not break out the total debt for the US and for other countries.
The US currently owes more than $19 trillion, and it’s projected to hit $22 trillion by 2022.
But if Congress acts, the debt will actually shrink.
The CBO estimates the US will owe $2.4 billion on Thursday, down from $2,858 billion.
The report doesn’t make a clear estimate of how much money the US would have to pay off the debt over the next five years.
However, the report does note that the US has been spending more than it can borrow, which has led to a shortfall in the national debt.
For example, it estimates that “by 2022, the federal government will have accumulated $18.3 trillion in debt.”
If Congress doesn to act now before midnight, it could end up with $15.5 trillion in total debt.
But it’s not clear how much debt the US can pay off over the long term.
In his press briefing on Tuesday, Elmendorw said that “if the United States is able and willing to borrow at the current rate of interest to fund our government, then we can potentially be able to pay down the national and international debt in a way that would make us more competitive.”
So far, the US hasn’t actually run out of money.
On Monday, the Treasury Department announced that the nation was not on the brink of default.
“This is an extraordinary situation,” Treasury Secretary Steven Mnuchin said in a statement.
“We have been able to manage our budget in a prudent way and we will continue to do so.”
Mnuchin added that “the Treasury Department is working to help us with the debt that we already have, and to ensure that we can continue to spend as efficiently as possible.”
However, Mnuchin did not specify what kind of assistance he could give the government.
The Treasury Department also has an option to borrow more money, called a “stopgap.”
In this option, the government is given the option of keeping the debt as it is or paying it off.
The option has been used by the US only twice since 2003, according, the Congressional Budget Board.
Mnuchin’s announcement on Monday came just days after the Treasury Secretary also said that the United State would be able pay down its debt “in a sustainable way.”
“We are currently on track to pay our bills and get our debt under control in a sustainable manner,” Mnuchin told reporters Monday.
“And if Congress does not act, we will have to start going forward and doing some very difficult, difficult things.”
It is not clear what kind, if any, economic impact Mnuchin was referring to when he said that if Congress didn’t act, the country would “have to start doing somevery difficult, very difficult things” as a result.
It’s possible that Mnuchin meant that the debt could be paid off in the form of interest payments or a new round of borrowing.
It is also possible that the current debt ceiling, which is set to expire on July 1, 2022, is already paying off its debt.
The Congressional Budget Commission, a nonpartisan agency, recently released a report on the debt and fiscal issues, finding that the federal debt is currently “well below” its pre-crisis peak.
The deficit, which includes interest, is expected to reach $1 trillion by 2019, which will have a significant impact on the US economy.
“The debt ceiling crisis is creating uncertainty and instability in the financial markets, causing the government to delay important debt payments and creating an economic drag on the economy,” the commission said.
It also noted that the $1trn debt ceiling has resulted in a significant number of US companies that had already reported lower profits due to the crisis being unable to access capital due to their inability to pay back the debt.
As a result, the Federal Reserve has been keeping interest rates low, which could affect the economy.
Treasury Secretary Mnuchin also said on Monday that he believes the debt increase will not hurt the economy as a whole.
“There is no impact