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Why I am optimistic about the debt ceiling crisis
House Republicans said they will not support increasing the debt ceiling unless they get spending cuts, what is the workaround?
The U.S. government’s deadline to raise the $31.4 trillion debt ceiling could be sooner than expected, and the Department of the Treasury has been undertaking a set of “extraordinary measures” so that the debt limit does not yet bind. Many studies have shows that if the debt ceiling binds and the U.S. Treasury does not have the ability to pay its obligations, the negative economic effects would quickly mount and risk triggering a deep recession.
According to the U.S. Department of Treasury:
The debt limit is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.
Congress set the limit on the amount of money the government can borrow to meet its financial obligations. When the debt ceiling is reached, the government cannot borrow any more money unless Congress votes to increase the limit.
