The U.S. government is deliberating about raising its debt ceiling, the legal limit on government borrowing. Failure to do so could cause knock-on effects on the global economy.
- There has been talk about the U.S. raising its debt ceiling, although no conclusive decisions have been made so far
- If the U.S. does not raise its debt ceiling, it could eventually run out of funds for public spending
- This would also unleash chaos on the U.S. economy as well as others globally
The debt ceiling is the legislative limit the United States Congress sets on the amount of national debt the government can accumulate. There have been recent discussions about the U.S. possibly raising its debt ceiling so it does not default on its debt.
These discussions have also led to the possibility of what happens if the U.S. does not raise its debt ceiling.
Simply said, it would unleash global economic chaos like it did in 2011 and 2013. According to economist Mohamed El-Erian, this could even tip the U.S. toward a possible recession.
It would run out of money for public spending and obligations such as social welfare programs, healthcare and Medicare, defense and national security, education, public safety and law enforcement, and others.
Moreover, it would affect international trading between the U.S. and its trading partners like China, Japan, South Korea, Canada, Germany, Mexico, the United Kingdom, France, and more, eventually affecting these economies.
Overall, the U.S.’s failure to raise its debt ceiling could have many impacts. To find out what the public has to say about this, Real Research launched a survey on the U.S. debt ceiling and the effects of a debt default. Hurry and answer the survey on the Real Research app from March 27, 2023. After that, you will receive 60 TNCs as a reward.
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