I'm no expert in government finance, but this headline seems incredibly misleading: "Snow warns Congress: US government's cash running out". What Treasury Secretary Snow is really warning Congress about is that the country is about to overtop the debt limit of $8.184 trillion that Congress set by law. How is running out of credit the same as running out of cash? Cash is an asset, but running up debt is just increasing a liability. That's like me complaining about running out of money because my credit cards are maxed -- our country ran out of money a long time ago!
"I am urging members of Congress in the strongest possible terms to resist coupling an increase in the debt ceiling with other issues," Snow said.
"Rather, they should vote to raise the ceiling this week. It would be unthinkable for them not to take action," he said, warning that the "full faith and credit" of the US government was too precious to be compromised.
Snow has issued increasingly urgent warnings to Congress that the statutory debt limit of 8.184 trillion dollars will be hit this week, and that the government will then lose its borrowing power.
Once the US government reaches the ceiling, it comes under threat of defaulting on its debts and can lose the ability to raise future credit on the capital markets.
So Secretary Snow apparently understands the difference between cash and debt; maybe the AFP should teach a little economics to its headline writers. Maybe someone should teach Congress a little economics, too.