Should the political impasse in Washington remained unresolved, the US Treasury had warned that it would be hitting the country's USD 16.7 trillion debt cap by October 17. According to Reuters Factbox, the US could default on its debts because for every dollar spent, it takes in about USD 0.70 in taxes. Thus, it would have to borrow money to be able to pay its obligations.
While there were a lot of investors willing to lend the US government cash, Congress had placed a limit on how much debt the government would be able to borrow. As of the moment, no deal had been agreed to increase the debt ceiling.
Technically, Reuters said Washington will not go bankrupt on October 17. However, Factbox had explained that it would have very little cash left. Bills owed by the government to its creditors would then had to be paid using remaining cash left and any other fresh revenues that would be coming in. The estimated USD 30 billion that would be left in the bank would reportedly not last long.
According to the Congressional Budget Office, the US would begin to miss some debt payments from October 22 to the end of the month.
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