The U.S. is "not a triple-A credit" and is running a "fiscal doomsday machine," David Stockman, former federal budget director under President Reagan, told CNBC Thursday.
"The system is totally broken. There is a complete stalemate," Stockman said. "They [credit agencies] aught to get it over with, cut the rating and begin to create some reality both in terms of the financial markets and the American public.
"The problem is not the ceiling, but the debt," he added. "It's the $6 billion a day that we're borrowing day in day out."
Stockman believes that Washington will come to some type of an agreement at the 11th hour, but it will only be a short-term fix.
"We are going to be facing a day of reckoning here, and I don't know whether it's six months from now or a year from now," Stockman concluded.