Good Question: What bills does the US need to pay that’s causing Congress to raise the debt ceiling?
LEXINGTON, Ky. (WKYT) - Once again, the topic of the fight over the debt ceiling is lasting right up to the deadline for a potential default. One viewer wanted to know, what is that debt paying for?
Today’s Good Question comes from a viewer who called our newsroom to ask, “What bills does the U.S. need to pay that’s causing Congress to raise the debt ceiling? Do we owe money to other countries?”
The simple answer for the bills is - all of them.
The bills paid for by the U.S. Treasury, including social security payments, payments to federal workers and the armed services, and Medicare and Medicaid, could all be delayed.
The United States government spends more money than it takes in, which means every year we take on more debt by selling government-backed securities. Investors, including other countries, buy those securities because they are considered good investments. We have an obligation to pay that debt.
The debt ceiling is how much debt we are allowed to take on, and it’s set by Congress. It has been raised more than 70 times since the 1960s. If that amount isn’t raised by June 1, we would likely default for the first time ever.
Since it’s never happened before, economists aren’t exactly sure how it would play out, but they think a global recession would likely follow. We could also see a further rise in interest rates. And those payments relied on by millions of Americans could also be at risk.
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