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National debt could hit $16 trillion mark within days

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    CBO warns scheduled tax hikes, spending cuts could cause recession

  • Duration 2:54
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I'm Trace Gallagher this is studio being in the economic situation apparently heading in the wrong direction.

This is a lot look at the national debt as it races toward an alarming milestone.

For the first time it is set to pass the sixteen trillion dollar mark and it could happen within just days.

The news comes on the heels of this week's dire warning from the feds.

The nonpartisan Congressional Budget Office reported the US could be headed toward a major recession early next year.

The report.

Cautioning congress to act before scheduled tax hikes and spending cuts take effect later this year the report says that so called fiscal cliff.

Could erase any economic recovery and cost millions of jobs.

Doug Callaway with the news he's live for -- in DC dot.

Trace that's -- really alarming figure did you show that -- sixteen trillion dollars and here's one way to visualize the US debt that sixteen trillion if you want to spend.

A dollar every second.

For 32000 years you spend just one trillion dollars so multiply that times sixteen and that's where we are.

The national that is certainly ticking time bomb and it it's it -- no question that if we don't do something about it it's gonna go off.

There reaches a point economists agree at which time did debt becomes unsustainable where interest payments on the debt alone create an economic implosion.

And without significant reductions and either spending.

Or significant increases in revenue that implosion is on the way.

Compounding the problem the baby boomers those born between 1946 and 1964.

U and -- Trace the first of them are now retiring.

-- we're facing this avalanche of seniors.

Moving into Medicare and Medicaid and Social Security.

So federal expenditures driven by a largely -- Medicare and Medicaid.

Are going to go up faster than the economy can grow.

Adding urgency is what does some call tax -- get and what you just referred to the approaching December 31 deadline in which the temporary payroll and bush era tax cuts expire.

And when seek a straight sequestration huge -- -- military budget and other federal programs -- -- I would be a significant tightening.

A fiscal policy.

And we're probably lead to a reception early next year.

Economists point out that it's not necessarily the sixteen trillion figure that is so dangerous in and of itself it's the trajectory of the debt the most matters.

If the economy grows robustly.

That trajectory starts to level out.

But as we all know the economy has basically been a neutral in four years of stimulative efforts while causing -- trillion dollar deficits.

Have done very little to produce the intended results Trace.

And you and -- the tail end of that baby boom would you -- -- just seven left for us Doug MacCallum live force in DC Doug thank you will sobering.

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