CBO warns US facing debt crisis

A rising level of debt, combined with an excess of spending over revenue “would increase the probability of a fiscal crisis for the United States,” the nonpartisan agency said, repeating a warning it made last July.

“In such a crisis, investors become unwilling to finance all of a government’s borrowing needs unless they are compensated with very high interest rates,” the CBO said, adding that “there is no way to predict with any confidence whether and when such a crisis might occur in the United States.”

But it said, “All else being equal, however, the larger the debt, the greater the risk of such a crisis.”

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