Debt market to stoke U.S. national debt

WASHINGTON, Jan. 3 (UPI) -- Financial analysts warn of some potentially dire times ahead when the maturity date for a large chunk of the U.S. government debt held by investors comes due.

About 40 percent of the debt will mature in a year or less, meaning the government will have to come up with the cash to pay it off and then offer even higher interest rates to attract new investors, The Washington Post reported Saturday.

"There's a time bomb in there somewhere," said Lou Crandall, chief economist at Wrightson ICAP, "but we don't know exactly where on the calendar it's planted."

The new finance spending plus an anticipated economic stimulus package could jack the U.S. national debt up by as much $2 trillion this year alone, analysts told the Post.

Adding to the degree of difficulty is the role of foreign investors who may or may not be attracted to the new U.S. long-term securities amid the economic uncertainty.