US debt in stacks of dollar bills would wrap world 35 times

US Vice-President Joe Biden is leading talks on America’s spiralling debts, with pressure growing for an agreement to be reached that would let Congress raise the $14.3tr debt ceiling before a deadline on 2 August.

Top Republicans have said that any increase in the country’s debt ceiling would have to be matched by an equal amount of spending cuts.

Members of the Biden group have conditionally agreed on at least $150bn in cuts. But that is far short of the more than $2tr in deficit reduction needed to ensure that the debt ceiling issue is not revisited before the November 2012 elections.

 US credit rating in danger of being downgraded

Budget experts say the US needs to reduce deficits by $4tr over the coming decade to ensure its debt remains at a manageable level.

Republicans and Democrats have both said the Biden talks are not moving fast enough, and time is starting to run short.

Moody’s credit rating agency has warned that it may consider cutting the United States’ top credit rating if there is no progress by mid-July.

The potential for market chaos if there is not a deal soon means both President Barack Obama and House Speaker John Boehner, the top Republican in Congress, have said they would like to get a deal within a month.

American economy: what role does China play?

China, the largest foreign creditor to the United States, holds about $1tr of the United States’ outstanding debt.

America’s debt is clocking up thousands more dollars every second, equivalent to $45,000 per US citizen. Channel 4 News calculated that if dollar bills were stacked on top of each other, the money owed would circle the globe 35 times (and counting).