In six weeks, the Debt Ceiling extension may end. On October 12, 201; The House of Representatives approved an extension of the nation's debt limit through early December 2021. The United States debt ceiling is a legislative limit on the amount of national debt that can be incurred by the U.S. Treasury. The debt ceiling limits how much money the federal government may pay, on the debt they already borrowed. The Debt Ceiling was created in 1917, during the Woodrow Wilson presidency in the USA. Also, the debt ceiling acts as a limitation on the federal government's ability to finance government operations. Furthermore, today's blog story discusses the 2021 debt ceiling crisis and three other major debt ceiling crises [1995; 2011; and 2013]. In 1995, the debt ceiling increase led to debate in Congress on reduction of the size of the federal government that led to the non-passage of the federal budget. Unfortunately, the US federal government went through a shutdown from 1995 to 1996 that lasted 26 days. The debt ceiling was eventually increased which resolved the government shutdown. In 2011, Republicans in Congress used the debt ceiling as leverage for deficit reduction. From the debt ceiling debacle came an increase in the debt ceiling to $16.394 trillion. Next, the United States again reached the debt ceiling on December 31, 2012 and the US Treasury began taking extraordinary measures. The No Budget, No Pay Act of 2013 suspended the debt ceiling from February 4, 2013 until May 19, 2013. The law placed temporary restrictions on Congressional salaries. The total crisis ended on October 17, 2013 with the passing of the Continuing Appropriations Act 2014. There was a continuing debate about the appropriate level of government spending, and the use of the debt ceiling in such negotiations. The US Treasury began taking extraordinary measures to enable payments, and stated that it would delay payments if funds could not be raised through emergency measures. In addition, the U.S. Treasury began taking "extraordinary measures" which were set to expire around October 18 as a result of the expiration of the suspension of the debt ceiling in July 2021. Under President Joe Biden, the debt ceiling crisis should be resolved by December 3. The current US treasury secretary, Janet Yellen states that it will be lawmakers' responsibility to raise the federal debt limit. She has expressed confidence that Congress would do so, after the temporary reprieve runs out on December 3. If the debt ceiling is not lifted, the US economy could go back into recession. This economic malaise would result in higher unemployment, and the US stock markets plunging. In this penultimate paragraph, let's discuss the amount borrowed by the US government. That whopping figure is close to $28.5 trillion. If the U.S. government would not be able to meet its debt obligations, the country would go into default. This event has never happened in U.S. history. Ironically, The National Debt Clock billboard is displayed on a building in midtown Manhattan. This billboard in the picture above would have to devise a new way of displaying the national debt, if the USA goes into default. In closing, here are some major economic problems that would happen if the debt ceiling is not fixed. Social Security payments would not go out; and U.S. troops and federal civilian employees would not be paid. Veterans could see compensation or pension payments lapse. Plus, millions of Americans on food assistance would see benefits stop. In the end, the US government has to collaborate on a new solution for ending the Debt Ceiling Crisis. Good day!
