Debt Limit Monday

Today the U.S. officially reached its $14.3 trillion debt ceiling, meaning it can no longer borrow funds to pay its bills.

Treasury Secretary Geithner has previously said he will take special measures to buy time and prevent a default on U.S. debt – today he announced Treasury will begin borrowing money from retirement funds for federal workers (see). The move will not affect workers’ pensions, since Treasury is required by law to replace any funds and earnings on those funds once the debt limit is raised.

Last week, Geithner suspended sales of low-interest Treasury securities that help local and state governments manage their finances. The last time similar action was taken was during the liquidity crunch in September 2007.

Reuters has a good summary of a set of several other steps Treasury could take here.

One action that Secretary Geithner is apparently not contemplating: auctioning-off U.S. assets. Selling all the gold in Fort Knox will only knock $370 billion off the national debt according to a Washington Post piece.