America must raise the debt ceiling soon. US Treasury Secretary Janet Yellen fears the country may no longer be able to meet all of its financial obligations on June 1. What is going on? Do we notice that too?
The US Congress occasionally sets the debt ceiling to determine how much money the government can borrow. At the moment, according to its own laws, the country’s national debt of 31.4 trillion dollars (almost 29 trillion euros) cannot be contained. Then the credit limit will be reached.
In fact, that ceiling was already reached in January. But Congress took special measures that allowed it to continue spending money. According to the US Treasury Secretary, it is difficult to estimate how long that will be possible. But there is a possibility that the money will run out soon. That’s why action needs to be taken soon, Yellen said Monday.
If the debt ceiling is not raised, this will have undesirable consequences. In the US, civil servants can whistle-blow about their salaries and benefits are no longer offered.
In addition, the US financial market is important to the international economy because of the government loans the country issues. So problems in the US market will have ramifications for Europe as well. It is still difficult to say exactly what the consequences will be. We will only know when the debt ceiling is actually reached.
Never in American history has the country been able to meet its financial obligations. However, the debt ceiling has been raised, extended, or revised nearly eighty times since the 1960s.
President Joe Biden is scheduled to meet with several congressional leaders on May 9 to address issues. The debt ceiling has long been a hot point between Democrats and Republicans.
Senate Democrats have long wanted to raise the debt ceiling. But House Republican Speaker Kevin McCarthy said last week that Republicans would only agree to some government spending cuts. Biden has refused to acknowledge this because the cuts would make some of his policy proposals impossible.
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