United States reached The maximum borrowing limitAnd the Treasury Department took action to prevent defaults, which would have devastating effects.
And the BBC clarifies that reaching the debt ceiling “the borrowing limit”, means that the government is not allowed to borrow more money, unless Congress agrees to suspend or change the ceiling, which currently stands at $ 31.4 trillion, which is what has already happened now.
Since 1960, politicians have moved to raise, extend or adjust the definition of the debt ceiling 78 times, including three times in the last six months alone.
However, recent tensions in Congress, where Republicans recently regained a majority in the House of Representatives and are demanding spending cuts, have raised fears that politicians will delay action this time, which could lead to a default by the United States for the first time in its history.
And about the expected impact, the BBC says that for most of the world, the impact will be almost invisible, at least in the first few months.
The Treasury could manage the situation by taking measures to avoid actually blowing the ceiling. In the past, this has included suspending investments you were supposed to make in retirement funds and health benefits for federal employees, and then returning those funds at a later date.
But even these delays come with an actual price. An earlier confrontation over the issue in 2011 led to S&P downgrading S&P For the credit rating rating of the United States for the first time.
Government analysts estimate that the delays this year caused the US Treasury’s borrowing cost to increase by at least $1.3 billion, and investors demanded higher rates in light of the uncertainty.
In the current situation, Treasury Secretary Janet Yellen estimated that the special measures being taken could buy time until next June, the point at which the government would not be able to pay its bills. Many analysts see this scenario as a real economic disaster.
