Government spending has always been a public concern.
At certain points in history, the US government has faced a debate about whether or not to raise the debt ceiling.
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The US government has changed its debt ceiling over 100 times in US historyPhoto credit: Getty Images – Getty
What is a debt limit?
According to the US Treasury Department’s website, the debt limit is the total amount the United States government can borrow to meet its existing legal obligations.
This includes Social Security and Medicare benefits, military salaries, interest on government debt, tax refunds, and other payments.
The debt limit was first introduced in 1917 and has existed for over 100 years. Since then, it has been lifted or suspended over 100 times.
The debt limit is also known as the debt limit.
What if the government hits the debt limit?
If the debt limit is reached and Congress decides not to lift it, the United States would default.
Default is the failure to pay a debt.
Failure to raise the debt ceiling would lead to catastrophic events, according to the Treasury Department’s website.
“[Failure to raise the debt limit] would spark another financial crisis, threatening ordinary Americans’ jobs and savings – and plunging the United States back into a deep economic hole just as the country recovers from the recent recession, “the website said.
If the government did not raise the debt ceiling, social security payments could not be made, federal employees and US troops would not be paid, and food stamps would come to a standstill.
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The US government has never run out of money in American historyPhoto credit: Getty Images – Getty
Has the government ever run out of money?
The debt ceiling has always been raised in the past.
The government has never defaulted in American history. This is expected to change in October if the debt ceiling is not raised.
Treasury Secretary Janet Yellen said there will be a historic financial crisis if the government runs out of money.
“A default could trigger a rise in interest rates, a sharp fall in stock prices, and other financial turmoil. Our current economic recovery would turn into recession, with billions of dollars in growth and millions of jobs lost,” Yellen told the Wall Street Journal.
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