The economy could suffer a massive hangover in the form of soaring debt from the government's efforts to rescue the financial system.

The administration is seeking authorization from Congress to borrow 700 billion dollars to take a mountain of bad loans off the books of financial firms.

It comes at a time when the federal budget deficit is already soaring.

The Bush administration is estimating the deficit for the budget year that begins October 1st will hit 482 billion dollars. And that doesn't include the 200 billion dollars being put up to cover the government takeover of mortgage companies Fannie Mae and Freddie Mac.

The figure also doesn't include any of the 700 billion the administration is seeking to soak up the bad mortgage-backed securities.

A draft of the rescue legislation says the administration wants to boost the debt limit to 11.3 trillion dollars.
That's an increase of 700 billion from the current limit.

But the higher the debt goes, the higher the government's borrowing costs and the less it has to spend on other programs. Interest on the debt is already costing taxpayers more than 400 billion dollars a year.