The question of when the US could default will come into sharp relief this week when the Treasury reveals how big its tax take is likely to be.
- The Treasury’s tax receipts will reveal how much cash it will have on hand as we approach the $31.4 trillion cap that will prevent it from borrowing.
- Estimates for the “drop-dead date” are wide — anywhere from early summer through to the US fall.
The funds from Tuesday’s tax deadline for most US taxpayers will show up in the Treasury’s bank account shortly after the deadline.
- The key question is how much that amount is and if it will be enough to keep the Treasury flush with dollars until around June when there’s an additional influx of tax money.
What to look for: Base on historical precedent, an increase in the Treasury cash pile of more than $200 billion following this week’s tax day would be strong, while a figure of less than $150 billion would be weak.