US Debt Ceiling: The Endgame?
The debt ceiling, in layman's terms, refers to the maximum amount of money that the United States government is allowed to borrow to cover its expenses. It is like a financial limit set by Congress that determines how much debt the government can accumulate. When the government spends more money than it collects in taxes, it needs to borrow money by issuing Treasury bonds or other forms of debt. The debt ceiling sets a cap on this borrowing. When the debt approaches the authorized limit, Congress needs to take action to increase the debt ceiling. If the debt ceiling is not raised, the government may not have enough money to pay its bills, such as Social Security payments, military salaries, or interest on existing debt. This situation could lead to a government shutdown or default on its financial obligations, which can have severe consequences for the economy and financial markets. Raising the debt ceiling does not authorize new spending; it simply allows the government to borrow enough money to pay for expenses that have already been approved by Congress. It is a mechanism to ensure the government can meet its financial obligations, but it is also a topic of political debate and can become a contentious issue when discussing government spending and fiscal policy. Treasury secretary janet yellen has warned that US may be unable to meet all of its spending obligations by June 1. Is this the endgame for USA economy?
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