According to a recent report, the United States government faces a “significant risk” of failing to satisfy all of its financial obligations as early as June.
According to a report published by the U.S. Congressional Budget Office (CBO) on May 12, the danger of the U.S. government defaulting on its debt shortly originates from the fact that on January 19, the country reached its statutory debt limit of $31.4 trillion.
The CBO predicts that if the debt ceiling is not raised by June, the U.S. government could be in financial trouble.
It was noted that:
“CBO projects that if the debt limit remains unchanged, there is a significant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations.”
The CBO predicts the federal budget deficit will be $1.5 trillion in 2023, which is $100 billion higher than the February estimate.
It was emphasized that the outcome of the ongoing Supreme Court case regarding the cancellation of outstanding student loan debt could have a substantial impact on 2023’s total revenue.
According to the report, a shortfall in tax receipts through April has the potential to contribute to a larger deficit than was initially anticipated.
However, based on its projections, the CBO does not anticipate a reduction in the deficit’s growth anytime soon; the annual deficits are expected to “nearly double over the next decade,” reaching $2.7 trillion in 2033.
The CBO predicts that the national debt will reach its highest level ever recorded in the United States in 2033, stating:
“As a result of those deficits, debt held by the public also increases in CBO’s projections, from 98 percent of GDP at the end of this year to 119 percent at the end of 2033 — which would be the highest level of U.S debt ever recorded.”