America faces a debt nightmare

On a wallgdp in Manhattan, not far from Times Square, America’s debt clock ticks higher, from $3trn when it was inaugurated in 1989 to more than $31trn today. After climbing for so many years with no obvious economic fallout, it is easy to ignore, not least because it was moved from its location on a busy street corner to a quiet passageway. But its relentless climb is suddenly a . That is because its numbers are now butting up against America’s debt ceiling—a as manufactured as the clock itself, though one that presents a far graver danger.The debt ceiling is the amount Congress has authorised America’s government to borrow in order to meet its basic obligations, from providing medical insurance to paying military salaries. The current ceiling for gross debt is $31.4trn (117% of ), and America is careening towards it. On May 1st Janet Yellen, the treasury secretary, warned that the government was set to exhaust its cash reserves and run out of budgetary gimmicks as soon as June 1st.