The US is expected to hit the debt ceiling before the end of the year unless Congress takes radical action to avoid this happening, it has been claimed.
Treasury secretary Jack Lew has warned that the debt ceiling – which was raised in January – could be hit as soon as October.
Writing to house speaker John Boehner and other lawmakers, Mr Lew stressed that the "extraordinary measures" launched at the start of the year are due to end in a couple of months.
"At that point, the US will have reached the limit of its borrowing authority, and Treasury would be left to fund the government with only the cash we have on hand on any given day," he said.
Mr Lew added that if no action is taken and the government is left with no borrowing authority, the US would be put in an "unacceptable" position.
The US economy has stumbled to recovery of late and was affected recently by a technical glitch on the Nasdaq stock exchange that prevented trading for three hours.
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