Debt Ceiling Crisis

Context:

In little more than a week, the US government could default on its borrowings — an unprecedented situation that could potentially hit economies worldwide — if Congress doesn’t raise the nation’s debt ceiling.

About US Debt Ceiling:

It is the total amount the US government is allowed to borrow to finance its expenditure, such as paying salaries and welfare allowances.
Current limit: $31.4 trillion.
Introduced in: In 1917 when the US entered World War I.
Constitutionally, Congress controls the government’s purse strings.
Purpose:
1. To make it easier for the executive to operate without having to turn to Congress every time it wanted to spend
2. To allow the government to borrow as required as long as it is kept under the debt limit approved by Congress.

Possible impacts if the govt defaults:

The government would no longer have the money to function, and would have to decide who gets salaries, and how much.
Harm to the global leadership position of the USA and questions about its ability to defend national security interests.
US’s credit rating would be downgraded, making future borrowing more expensive.
Probable weakening of the dollar and the collapse of stock markets.

News Source: Indian Express

To get PDF version, Please click on "Print PDF" button.

Recent Post
Most Viewed Post

Restructuring of National Testing Agency (NTA)

Bank Credit to Women Self-Help Groups

WHO-GARDP Report on Antibiotic Shortages

Assam Bird Sanctuary

New Undersea Cables to Boost India’s Digital Connectiv...

NATIONAL Commission for Women (NCW)

Social Stock Exchange

Data Point

Arsenic and Fluoride In Groundwater

WHO Launches ICD 11 – A Traditional Medicine Module 2:...

Prime- Minister’s Egypt State Visit

Drug Controller General of India

Recent Editorial

On India-China Talks, Ties

The Resilience of Democracy

Should Legislatures in India have Fixed Tenures?

Revamping National Testing Agency (NTA): A Compreh...

What Indian PM’s First Visit to Kuwait in Fo...

Making Affordable Generics More Reliable

Popular current affairs

Restructuring of National Testing Agency (NTA)

Bank Credit to Women Self-Help Groups

WHO-GARDP Report on Antibiotic Shortages

Assam Bird Sanctuary

New Undersea Cables to Boost India’s Digital...

NATIONAL Commission for Women (NCW)

Our Courses

Our Courses

Need help preparing for UPSC or State PSCs?

Connect with our experts to get free counselling & start preparing

THE MOST
LEARNING PLATFORM

Learn From India's Best Faculty

Contact Details

THE MOST
LEARNING PLATFORM

Learn From India's Best Faculty

Follow Us:

Contact Details

Download Our App