U.S. To reach the actual debt in March (or June) limit 2014

By EconMattersIt was last month that many US Lawmakers negotiated an agreement suspending the ceiling of the debt through February 7 to put an end to the closure of the Government, and the Treasury Department could continue borrowing.  After February 7, Treasury will still be able to use "exceptional measures" to avert default.With the current national debt to one without previous $17.1 trillion (one analyst thinks it could double to 34 trillion $), any reasonably intelligent person wonder how long will last this foot-le-RCA one band-aid.  Both the Bipartisan Policy Center and the Board of Treasury Secretary Jacob J. Lew suggested that extraordinary measures were passed in a month or two, i.e. in March 2014.Now, according to a report released today by the Congressional Budget Office (CBO), U.S. may be able to revise the date of debt ceiling no later than June because tourism revenue around the tax deadline April 15 tax could provide more cash cushion to carry out the obligations laid down.CBO:Overall, the federal Government should run a deficit for fiscal year 2014... Given the volume of daily cash from the Government and uncertainty about the extent of the main transactions..., the treasure could exhaust its extraordinary measures and permission to borrow as soon as March or as late as in may or June.How America got itself in this situation?  Slowly but surely... by outspending its income.  The following table in USA Today shows federal income vs federal spending since 1996 (in thousands of billions of current dollars).Meanwhile, OECD is already panic at the idea of a binding of the US debt ceiling.  In his presentation of the World Economic Outlook yesterday, OECD included these three tables scary to demonstrate the disastrous economic consequences to the United States and the rest of the world with an abyss of debt for a whole year ceiling.It is highly unlikely that the US Congress could re-election leaving the debt limit traffic jams (and judgment of the Government) go during a whole year.  However, I believe that OECD is concerned about the negative impact on the already fragile global economy and stock markets, even for a few weeks.Remember that the increase in the debt ceiling does not solve the root cause of breach of limit of debt. To avoid recurring debt ceiling confrontation, Washington must address how to reduce federal spending or to increase their income.  Unfortunately, any increase in federal revenues, in my opinion, will involve some sort of tax increase mostly to the middle income class.  And cutting federal spending seems to be in constant mode of a step forward, two steps back.Unlike the Fed QE which mainly benefits the rich 1% (and should be "tapered"!), federal spending, however unprofitable, it can be sometimes, actually get injected into the real economy. So when billions of federal spending disappears from the economy, it will result in loss of revenue and jobs affecting many entrepreneurs of the State and the average income for America.  Furthermore, whatever expenditure savings that can materialize tend to get sucked by a program of Government colossally mismanaged as ObamaCare, which bills will eventually be angular, again by none other than the middle income class.While the middle class has been a major force reshaping the America since the second world war, I doubt that he is everything left to help dig the country of this juice debt trap.  Overall, 2014 is expected to be a year of several crucial decisions for the United States on its debt limit permitted, monetary programme (QE), or perhaps Obama will remain in history as a president of the ObamaCare hits the coin $1 billion Platinum?© EconMatters all rights reserved | Facebook | Twitter | Alert poster | Kindle