Taking Debt Ceiling To The Brink

A balanced, non emotion driven, factual analysis of some of the potential effects that another Congressional delay concerning decisions on the debt ceiling will have across the spectrum.

econprofaj

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As we enter into the second week of the government shutdown, a more ominous threat looms as the U.S. approaches the debt ceiling.  The debt ceiling has always existed as one of the powers of the U.S. Congress in controlling the spending and taxation activities of the government.  Even though the Executive office can create legislation with a President’s signature, Congress can prohibit its funding by imposing a debt limit which limits the U.S. Treasury’s ability to finance current obligations.

We have already reached the debt ceiling, but Treasury Secretary Jack Lew has been able to employ ‘extraordinary measures’ to prevent the U.S. from not being able to pay for funding already authorized by Congressional legislation.  These measures include underinvesting in certain government funds, suspending the sales of nonmarketable debt, and trimming or delaying the auctions of securities.  However, these methods will be exhausted by October 17th.

While it is…

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