Author: Matt Hill, ANU

US government finances are in a sorry state. As the federal debt threatens to break the ceiling of US$14.3 trillion authorised by Congress, an extension of Washington’s self-imposed credit limit is required by 2 August.

That this extension will be authorised is certain; as US Treasury Secretary Timothy Geithner has admitted, only a temporary delay can be afforded before the world’s largest economy faces the unimaginable possibility of defaulting to its creditors. Yet while a temporary reprieve, this fiscal expedient will not banish the implications of America’s increased indebtedness. Read more…