"As defined by the Treasury Department, the debt limit is the total money that the government is allowed to borrow to fulfill its financial obligations. That includes funds for social safety net programs, interest on the national debt and salaries for troops. While the debt ceiling debates are often tied to the prospect of future spending, in fact they involve financing of obligations that are already on the books.
As defined by the Treasury Department, the debt limit is the total money that the government is allowed to borrow to fulfill its financial obligations. That includes funds for social safety net programs, interest on the national debt and salaries for troops. While the debt ceiling debates are often tied to the prospect of future spending, in fact they involve financing of obligations that are already on the books.
Would it really be a good idea to do away with the debt limit?
A lot of people think so. Few lawmakers from either party enjoy a vote on the debt ceiling, and the default that would be caused by a failure to raise it would lead to an economic catastrophe. Jason Furman, an Obama administration economist, said that the risks of accidental default were on the rise, and that the benefits of greater fiscal responsibility produced by the debt ceiling had been diminished.
“In most countries, a fiscal crisis is when people don’t want to lend to the government anymore,” Mr. Furman said. “In the United States, the main fiscal crisis is if we unilaterally shoot ourselves in the head.”
He added, “Taking that gun away would be a good idea.”
https://www.nytimes.com/2017/09/07/us/politics/debt-ceiling-explanation.html?hpw&rref=politics&action=click&pgtype=Homepage&module=well-region®ion=bottom-well&WT.nav=bottom-well
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