Slate.com has an article about the debt ceiling and why the Republicans won’t stall the process of raising the debt ceiling the next time around.
The potential for a debt ceiling crisis in the U.S. appears to be diminishing, according to analysts. The debt ceiling is a legislative limit on the amount of debt the U.S. government can incur, and it must be raised periodically to allow the government to continue borrowing.
In the past, debates over the debt ceiling have led to high-stakes standoffs and even government shutdowns.
The United States has never defaulted on its debt in the traditional sense of the term. Default refers to the failure to make timely payments of interest or principal on a debt obligation.
While there have been situations where the U.S. government has faced challenges in meeting its debt obligations, it has always ultimately found a way to avoid default.
One example of a near-default situation occurred in 2011, when Congress and the Obama administration were unable to reach a agreement on raising the debt ceiling, which is a legislative limit on the amount of debt the U.S. government can incur. This led to a partial government shutdown and a high-stakes standoff that ultimately resulted in a last-minute deal to raise the debt ceiling and avoid default.
The U.S. government has a number of options available to it to avoid default, even in the event of a disagreement over the debt ceiling or other issues. These options include prioritizing certain payments, using emergency measures, or taking other actions to meet its debt obligations.
Overall, while the U.S. has faced challenges in managing its debt in the past, it has always ultimately avoided defaulting on its obligations.
However, House Republicans, who have been a driving force behind debt ceiling showdowns, are now in the minority and lack the leverage they had previously.
In addition, the incoming Biden administration has indicated that it will prioritize addressing the issue of the debt ceiling, which may help to prevent a crisis from occurring.
These kinds of events could lead to a loss of confidence in the United States, because the US has never defaulted on its debt obligations. The US Dollar has become the world’s reserve currency in part because it has never defaulted on its debt.
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