- What is the debt ceiling? The debt ceiling is the legal limit on federal borrowing.
- When was the debt ceiling first implemented? The debt ceiling was first implemented in 1917 to manage WWI expenses.
- How has the political debate over the debt ceiling affected the credibility of the U.S. dollar? The debate over the debt ceiling weakens dollar credibility and raises default risk.
- How does the U.S. compare to other countries in terms of having a debt ceiling? Few countries have debt ceilings; the US practice is fairly unique.
- What happens if Congress doesn’t raise or suspend the debt ceiling? If not raised, default occurs, causing economic and financial chaos.
1. Govt shutdown: non-essential services close
2. Delayed pay: hardship for federal workers
3. Economic instability: potential recession/depression
4. Higher borrowing costs: increased interest rates
5. Global financial shock: international market crisis
6. Weakened global trust: #KINGDOLLAR damaged debtor reputation
7. Investment downturn:decreased investor confidence
8. Credit rating impact: difficult future borrowing
9. Negative impact on businesses:job losses
10. Social welfare impacted: Medicare and Social Security affected
11. Stock market decline:decreased investor confidence
12. Reduced federal aid: cuts to disaster relief
13. Educational programs impacted: grants and loans affected
14. Military operations impacted: delayed pay and funding
15. Reduced infrastructure investment: transportation and energy projects affected
16. Housing market decline: potential for mortgage rates to rise
17. Reduced consumer confidence: decreased spending and investment
18. Reduced job growth: potential for layoffs and reduced hiring
19. State and local government impact: reduced funding for public services
20. Reduced international aid: cuts to foreign aid programs.
21. #DebtDefault#USDebtCeiling#FinancialCrisis
