Nation's credit maxed out; dealing with the debt ceiling

7:00 PM, Jun 2, 2011   |    comments
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MINNEAPOLIS, Minn. -- We've heard a lot about the debt ceiling in the past couple of weeks. America, as a nation, has reached it. What to do about it is bringing out quite the battle at the nation's capitol.

$14.3 trillion dollars is the nation's credit limit. We're maxed out. "This is how much we've agreed among ourselves not to borrow more than," U of M Economics Professor Christopher Phelan said. "The main problem is that for about the last 3 years the federal government has been spending a dollar for every 60 cents it brought in. Sooner or later we're going to have to start spending the same as what we take in," he added.

The nation, Phelan says, is in serious trouble. That 14.3 trillion figure is more than hefty, and the nation keeps adding to it.  "That's about $5,000 per person per year. I said per person, not per family," the professor noted.

"We have an economy that's in terrible shape and we have a federal government that's out of control," Former MN Governor and Presidential Candidate Tim Pawlenty told NBC News.

The standoff in Washington continues. The President and Republican lawmakers have met, but continue to butt heads on how to get the debt down. Congress recently rejected the idea of raising the debt ceiling.

The Treasury Department says on the current path, come August 2nd, the nation will begin defaulting. "August 2nd is when they're currently saying they're going to run out of these short term tricks and what happens after that I don't know, because it has not happened before," Phelan concluded.

(Copyright 2011 by KARE. All Rights Reserved.)

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