The US is most likely to run out of money after 10th October, 2021 if they fail to raise the debt limit.
In this case study we would be covering about -
What happened in US?
History of US debt Crisis?
How the republicans refuse to raise the debt limit?
What happened in the US?
The US is most likely to run out of money after 10th October 20 21, if they fail to raise the debt limit.
The US has been following the debt limit that was started by some elected representative during the first world war to keep a check of the cost.
Interestingly, the country has been following the debt limit system ever since.
History of debts in the US?
Ever since the beginning, debt has been a part of a country's operations.
The US authorities were first found in debt in 1790, Following the Revolutionary war. Ever since, that has been fueled over the centuries by more war and by economic recession.
The countrywide debt level of any nation is a measure of how much the government has its creditors.
The ratio of debt to Gross Domestic Product is more important than the dollar amount of debt.
As of October 1 2021, the US national debt is $ 28.8 trillion and Rising.
In recent years the US government has preferred to suspend debt ceilings for a fixed time instead of raising the ceiling amount. when the suspension period lapses the government increases the debt ceiling to the amount during the suspension period. If the US Congress does not raise a ceiling after the suspension period, it will lead to a fiscal crisis. Debt ceiling has been suspended in 2013, 2014 ,2015 ,2017 and 2019 and now once more attempted in 2021 and raised after the lapse of the suspension period.
According to Senate Minority Leader, Mitch McConnell -
"Republican votes for raising the debt limit will not be provided by us"
"Bipartisanship is not a light switch that democrats get to flip on when they need to borrow money and switch off when they need to spend money."
How do the republicans refuse to raise the debt limit?
If the government does not raise the debt limit coma then the country might face the following preparations in the future:
Financial markets would lose faith in US.
Dollar would be can leading to depreciation.
NY stock exchange would crash down after effect.
Social security payments could not be made ultimately resulting in non payment of salaries of Federal employees and US troops.
Food stamps would come to a halt including that of public parks and Federal buildings will also be under the impact.
Failing to increase the debt ceiling would lead to catastrophic events, according to the US Treasury website.
The website States -
“Failure to raise the debt limit would precipitate another financial crisis and threaten the jobs and savings of everyday Americans - putting the United States right back in a deep economic hole just as the country is recovering from the recent recessions.”