Dept Ceiling Research Paper

642 Words3 Pages
On August 2, 2011, the United States will reach its dept ceiling of 14.292 trillion dollars. This means that legally the US government cannot spend another dime without a vote to raise the limit for the 75th time since 1962. If the national debt ceiling is not raised by the August deadline, the US Government would either have to default on some of its debt or reduce spending by 40 percent which would adversely affect Social Security and other entitlement payments. The dept ceiling has to be raised to with a compromised plan of the gang of six. If the Dept ceiling is not raised we are facing the United States having a bad credit reputation with other countries, risk a government shut down, and there would be panic by many Americans. If the…show more content…
“Paychecks for government workers, vendors and state and local governments would likely be withheld or not paid in their normal timely manner,” says Vincent Reinhart of the American Enterprise Institute. The Treasury might also decide to prioritize payments. Social Security recipients, who often rely on their check for daily living expenses, would probably be among the first in line. But so would bond holders: The government would likely do everything it could to protect its credit rating”. So by raising the dept ceiling the government would be able to avoid a shutdown that would greatly impact Americans. Americans are already having a hard enough time as it is with the way the job market is already proven by the high number of people on unemployment. “All that sounds like an Armageddon scenario. But those assessments are widely held by mainstream economists who don't have a partisan stake in the debt talks. They're not saying the world would actually end, but they are warning Washington that jobs and livelihoods – not just political wins and losses – are at stake.” With the cut of social security, unemployment, higher taxes and other consequences that would follow the Americans would be in
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