United States: Will the American government soon run out of cash?

In January, the world's largest economy reached the threshold beyond which it is, in principle, prohibited from borrowing to finance itself.

But the Treasury then took temporary "extraordinary measures" to freeze spending and allow the government to meet its existing deadlines. "There is a reasonable likelihood that both cash and extraordinary measures will be exhausted in August," the Treasury Secretary warned.

Blockade in Congress

Republican lawmakers, who hold the majority in both houses of Congress, have not yet reached an agreement on the technical details of suspending or raising the debt ceiling. "I respectfully urge Congress to raise or suspend the debt limit by mid-July […] to preserve the credibility and confidence (of the international community and investors) in the United States," urged Scott Bessent.

At the end of March, the Congressional Budget Office (CBO) had already warned that the United States risked defaulting on its debt in "August or September 2025" due to a lack of parliamentary approval. The world's largest economy has never experienced a debt default, an event that would have catastrophic consequences for the United States.

Long treated as a nonpartisan issue, the debt ceiling became a political tool in the mid-1990s and has been the source of impasses that have brought the United States to the brink of default more than once. "Past episodes have shown that waiting until the last minute to suspend or raise the debt limit can have serious negative consequences for financial markets, businesses, and the federal government," wrote Scott Bessent.

After one of these crises, in the summer of 2011, the financial rating agency Standard and Poor's decided to lower the rating of the United States, depriving it of the prestigious AAA rating.