WASHINGTON (Reuters) - U.S. Treasury Secretary John Snow warned lawmakers on Thursday that a legally set limit on the government's ability to borrow will be hit in mid-February and urged Congress to raise it quickly.

Failure to do so potentially risks throwing the country into its first default in history, Snow warned in what has become virtually an annual rite as U.S. borrowing needs spiral.

"The administration now projects that the statutory debt limit, currently $8.184 trillion, will be reached in mid-February 2006," Snow said in a letter to 21 members of the U.S. House of Representatives and Senate released by Treasury after financial markets had closed.

Snow said that Treasury, if the debt limit was not raised by then, would have to take "extraordinary actions" to keep paying its bills for everything from Social Security to national defense spending.

Even if Treasury took "all available prudent and legal actions to avoid breaching the statutory debt limit, we anticipate that we can finance government operations no longer than mid-March."

The debt limit was last raised in November 2004 by $800 billion to its current level. The letter to Congress does not specify an amount the Treasury wants the ceiling set at this time.

But he said quick action was needed to preserve the U.S. ability to borrow in global capital markets at the lowest rates possible.

"A failure to increase the debt limit in a timely manner would threaten this unique and important position," Snow said.

http://news.yahoo.com/s/nm/20051229/pl_nm/economy_debtlimit_dc

Congress spends worst that drunken sailors. Eventually we will not be able to pay off out debts, and at the point, the eceonomy is in shambles. This has one of two ways to go when we default on our loans, we either go to hyperinflation or a serere recession. Either way we are screwed. Thank you baby boomer for screwing the future generation of this country because of your retarded ecnomic policies. Of course, I didn't go to the Dick Chaney school of business where deficits don't matter.

Of course, I didn't go to the Dick Chaney school of business where deficits don't matter

deficits aren't neccesarily bad in any given year, its only when you have them consistently as we are now.

No matter how much the concept has been abused in recent years,
a cyclicaly balanced budget is if well executed, more effective than an annually balanced one.

They should close down that idiotic Homeland Securty boondoggle to start with. All departments should be audited and the liberal policies of handing out cash with no accountability stopped.

The deficit is about 2.3% of GDP, which is relatively insignificant. 3% is considered an acceptable deficit in the developed world, and many countries can't even manage to achieve that.

But yes, congress spends like there is no tomorrow. The easiest thing in the world to do is to spend someone else's money with no accountability. The debt will still be ther when the current members are dead and gone.