US borrowing tops 100% of GDP: Treasury
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US borrowing tops 100% of GDP: Treasury

Last Updated: Thursday, August 4, 2011, 10:04
 
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US borrowing tops 100% of GDP: Treasury

Washington: US debt has shot up USD 238 billion to reach 100 percent of gross domestic project after the government's debt ceiling was lifted, Treasury figures showed.

Treasury borrowing jumped Tuesday, the data showed, immediately after President Barack Obama signed into law an increase in the debt ceiling as the country's spending commitments reached a breaking point and it threatened to default on its debt.

The new borrowing took total public debt to USD 14.58 trillion, over end-2010 GDP of USD 14.53 trillion, and putting it in a league with highly indebted countries like Italy and Belgium.

Public debt subject to the official debt limit -- a slightly tighter definition -- was USD 14.53 trillion as of the end of Tuesday, rising from the previous official cap of USD 14.29 trillion a day earlier.

Treasury had used extraordinary measures to hold under the USD 14.29 trillion cap since reaching it on May 16, while politicians battled over it and over addressing the country's bloating deficit.

The official limit was hiked USD 400 billion on Tuesday and will be increased in stages over the next 18 months.

The last time US debt topped the size of its annual economy was in 1947 just after World War II. By 1981 it had fallen to 32.5 percent.

Ratings agencies have warned the country to reduce its debt-to-GDP ratio quickly or facing losing its coveted AAA debt rating.

PTI




First Published: Thursday, August 4, 2011, 10:04


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