Obama administration fail to free US from debt

The United States is failing to break through its debt deadlock. The US Federal Reserve is now gearing up to provide new guidelines to American banks to save themselves through resurging recession.In case the country fails to revamp its borrowing capacity, all the banks would face hard time to survive through tough waters.

Fed spokeswoman Barbara Hagenbaugh revealed on Thursday that the Federal Reserve is hopeful to provide proper guidelines for an operational financial planning.

The US Treasury has clarified that it would not be able to fetch more loans if the Congress fails to raise the debt ceiling from $14.3 trillion. This would also bring the possibilities of fall of Obama government eventually.

A debt default will also make the American economy succumb to severe financial crisis. The officer did not, however reveal anything about the measures of contingency plans being thought over by the authorities.

Officials also showed optimism that the US economy may survive this crisis provided Obama administration comes up with a hard solution before August 2 deadline.

Experts, however, predict severe results of debt default over US financial market and economy. The officials have also indicated of the possibilities of need for reevaluation of alternative strategies for US banks to be able to use emergency loans.