Australia has taken the unprecedented step of declaring a national crisis.
The US will have to pay off its national debt.
The announcement comes after months of uncertainty over the US’s finances and the country’s borrowing costs.
US Treasury Secretary Jacob Lew said on Wednesday the US government had a “high probability” it will have more than $100bn of debt outstanding by the end of June, about twice the amount of $82.7bn of outstanding debt.
He said the US had no intention of borrowing more money, and he would not discuss future plans for the US to pay back its debt, including the $4.7tn of mortgage debt that has accumulated in recent years.
Mr Lew said the government was also facing its first major economic downturn in nearly a decade, with the unemployment rate rising to 7.5 per cent, the lowest level in 30 years.
Mr Lew called the US economy “strong, healthy, stable, resilient, and resilient” but warned that the economic recovery would depend on the “political will” of Congress.
He also said he hoped the US would continue to press ahead with its plan to slash its budget deficit to 3 per cent of GDP, which it is not expected to do.
“Our plan is not just about cutting taxes, but we also want to reduce spending,” he said.
“And that’s why we’re also doing our best to cut spending and reduce the deficit.”
The US Treasury is forecasting the debt will grow to $100.4bn by the middle of this year, or around 3 per the current year.
The White House has said the debt is expected to grow by more than 30 per cent this year and more than 50 per cent by 2019.US Treasury says the debt has more than doubled over the past 10 years.
It said the economy was growing at 3 percent in 2015 and at 2 per cent in 2016, with inflation running at a healthy 2.5 to 3.5 percentage points per month.US President Donald Trump said last month that the US should get out of the debt spiral.
The US had the highest national debt in the world when the crisis began, according to the International Monetary Fund, at more than 300 per cent.
The debt crisis has hit hard in the US, with businesses and households struggling to borrow and pay back their debts.
At least 14 states have declared bankruptcy, including Nevada, Washington, California and Florida.
President Trump has also proposed a plan to privatise the US Postal Service and sell off the US Navy.
Senator Elizabeth Warren, a Democrat, has proposed privatising Medicare.
Despite a slow recovery from the financial crisis, the US remains the world’s second-largest creditor, after China, and the debt crisis will likely continue to be a major focus of economic discussion in the coming months.