It seems there is no limit on the US public debt. The world’s largest economy can afford it without any visible consequences. United States President Barack Obama raised the permissible limit to $20 trillion from $18 trillion and protected the nation from default for at least 18 months with a single strike of a pen. Currently, specialists at US Treasury report that the debt has reached the amount of $18.15 trillion, which exceeds the country’s GDP of $18.04 trillion. Tackling this problem was always accompanied by heated disputes among the representatives of legislative and executive powers, but this time it did not happen. The sides achieved a consensus rather fast, thus saving the country from default. So the US may keep on living on credit for the next 18 months. Some pundits suppose that after this period, the external debt will stand at a record print of $19.6 trillion. However, the figures do not seem as terrifying if you consider the details. Banking Analyst at RusRating Anton Tabakh comments on the situation: “In fact, the US has no external debt. The criteria of so-called ‘externity’ are the currency in which a debt is denominated. It is dollar-denominated and therefore inner. It is not considered a problem as the whole world is ready to buy its [US] bonds. It may become a problem if the country starts to sell its debt”. That is why the US default is hard to imagine. In the worst scenario, the government will issue the needed amount to meet the external debt.
