What is debt celling and what it would happen if the U.S hits debt celling?

What is the debt ceiling?

The debt ceiling, which Congress established in 1917, sets the maximum amount of outstanding federal debt that the United States government may accrue. What Happens When the U.S. Hits Its Debt Ceiling? This Means that Congress can limit the amount the US government can borrow to cover its costs. The debt ceiling is the name given to this cap, which currently stands at $31.4 trillion. The federal government uses borrowing to cover expenses included in its budgets, such as social security and Medicare payouts and the salaries of US military personnel. What is the US debt ceiling and what happens if it isn’t raised?

What happens when the U.S hits the debt ceiling

According to some experts, that would spell turmoil for American and world economies. In addition, hitting the debt ceiling would make it difficult for the government to pay for operations, such as paying for the national military or entitlement programs like Medicare and Social Security, even if there was no default. What Happens When the U.S. Hits Its Debt Ceiling?

Options to avoid a crisis?

Federal Reserve chair Janet Yellen has announced a plan to avoid the US government going over the debt ceiling. Prioritizing some payments, such as military wages, or postponing payments entirely for a while have been proposed. Either scenario would disrupt the financial markets and result in legal issues. The U.S. Hit the Debt Ceiling. What Does That Mean and What Happens Now?