Trouble for Bush as US debt soars

NEWS that the US national debt has broken through the $7 trillion (£3.7 trillion) barrier is expected to focus the financial markets on growing economic weakness showing in government statistics this week.

Although the Treasury said there was no special significance to the figure, the debt record is likely to spell political trouble for President Bush, who is accused by Democrats of profligate spending.

The widening budget deficit is perilously close to the $7.3 trillion above which the government would need Congress's blessing for further borrowing.

The national debt - the total borrowings of the federal government - is now well over half the country's $11 trillion gross domestic product at the end of last year.

Nor is there good news for Bush on the crucial issue of job creation.

The White House has joined Treasury Secretary John Snow in backing away from earlier more confident predictions that the economy would add 2.6m jobs this year.

To do that, the economy would have to create 460,000 new jobs for the next 11 months, a figure that almost everyone agrees cannot be achieved.