The US economy could suffer a huge hangover as a result of government efforts to ensure the security of the country's financial system, it has been claimed.

According to Martin Crutsinger, the economics writer for the Associated Press, the money committed by the government to buy up bad mortgage debt is likely to put further pressure on its already squeezed budget.

He points out that campaign promises made by presidential hopefuls John McCain and Barack Obama could be seriously constrained by the cost of financial bailouts.

"The government is already spending more than $400 billion a year just to pay interest on the national debt. The higher that debt goes, the higher the government's borrowing costs and the less it has to spend on other programs," writes Mr Crutsinger.

Meanwhile, Carnegie Mellon economics professor Marvin Goodfriend has told USA Today that the economy will be in a "danger period" for the next six to eight months.

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