United States Debt Ceiling thoughts
Historically, when the debt ceiling has not been raised and the US government has come close to defaulting on its obligations, it has caused turmoil in financial markets. For example, in 2011 when the US government came close to defaulting on its obligations, the Dow Jones Industrial Average fell 2,000 points and Standard & Poor’s downgraded America’s credit rating. This caused markets to plunge and borrowing costs to rise.
There could be severe consequences if the US Congress does not raise the debt ceiling. Government obligations such as Social Security or Medicare disbursements could be at risk. Buying a home, car, or credit card borrowing could get more expensive. Waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise borrowing costs for taxpayers, and hurt America’s credit rating. Soaring Treasury rates would set off a chain reaction in financial markets.
- AltCtrlMoo
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