United States, on the brink of default? Since 1960, the debt ceiling has been raised nearly 80 times

The United States Secretary of the Treasury, Janet Yellenwarned that the US could run out of liquidity on June 1 if Congress does not raise or remove the debt ceiling. What does it mean?

It means the United States it would be default. Why? Why would the United States run out of funds not only to pay the salaries of its civil servants and civil servants or social security benefits, but also interest and other payments to bondholders who own their debt.

Despite being the only country that issues dollars, the United States it is financed through debt and not through the broadcast. The plan is to borrow $726 billion during the quarter. This is $449 billion higher than expected in January, due to a lower cash balance at the start of the quarter and tax revenue projections. lower-than-expected and higher expenses.

Has this ever happened? YES

The debt ceiling has been raised, expanded or revised 78 times since 1960.

In this case, the Republicans in the House of Representatives they called for drastic spending cuts and the reversal of some aspects of President Biden’s agenda, including his student loan forgiveness program and green energy tax credits, in exchange for votes to raise the debt ceiling. That, in turn, prompted objections from Senate Democrats and President Biden, who said last week that the issue “It’s not negotiable.”

Has the United States gone bankrupt in the past?

a flaw it would be the first in US history. and could disrupt global financial markets and destroy trust in the United States as a global trading partner.

Experts have warned that a default could also affect the United States. enter a recession and cause unemployment to rise.

It would also mean that the United States. I couldn’t borrow money to pay government employee and military personnel salaries, welfare benefits, or other obligations, such as defense contractor payments.

Even weather forecasts could eventually be affected, as many rely on data from the federally funded National Weather Service.

How did this situation come about?

The US reached its limit on what it can spend in January and the Treasury Department has therefore taken a series of steps to prevent a potentially devastating default.

Hitting the debt ceiling means the government can no longer borrow money unless Congress agrees to remove or change the limit, which currently stands at nearly $31.4 trillion.

Typically, Congress ends up raising the debt limit.

In the 78 times this has happened, in three an agreement was reached on the abyss.

But this time, renewed tensions in Congress, where Republicans recently took control of the House of Representatives and are calling for spending cuts, have raised concerns that politicians will be slow to act this time around, which could lead the US to an intentional violation for the first time in its history.