U.S has hit the debt limit as Treasury Secretary Janet Yellen prepares 'extraordinary measures'

The Treasury Department is starting 'extraordinary measures' to avoid a U.S. fault after the federal debt limit was reached on Thursday, so the government can keep paying bills while Congress negotiates to try and avoid an economic meltdown.

American debt is now at an eye-watering $31.38 trillion - that's 120 percent of GDP, up from 39.2 percent as recently as 2008 and 77.6 percent in 2018.

The staggering figure is the highest since the Second World War, equals $246,876 in federal debt per taxpayer and is more than the economies of China, Japan, Germany and the United Kingdom combined.

In a letter sent by Treasury Secretary Janet Yellen to House Speaker Kevin McCarthy on Thursday, she warned that the 'period of time that extraordinary measures may last is subject to considerable uncertainty.'