Home » U.S. government debt ceiling approved to be raised by US$2.5 trillion to temporarily avoid government debt defaults

U.S. government debt ceiling approved to be raised by US$2.5 trillion to temporarily avoid government debt defaults

by admin

According to Xinhua News Agency, the US House of Representatives passed a joint resolution in the early morning of the 15th to raise the federal government’s debt ceiling by US$2.5 trillion, so that the US Treasury Department’s borrowing authorization can be extended to 2023, temporarily avoiding government debt defaults.

Senate Democratic leader Schumer said that this legislation can meet the borrowing needs of the federal government until 2023. This means that this year’s game between the Democratic and Republican parties on debt ceilings that lasted for several months has come to an end. The next confrontation will have to wait until after the congressional mid-term elections in November 2022.

The debt ceiling is the maximum amount of debt that the U.S. Congress sets for the federal government to meet the payment obligations it has generated. Reaching this “red line” means that the U.S. Treasury Department’s borrowing authorization has been exhausted. After raising the debt ceiling, the Ministry of Finance can issue new bonds to fulfill existing payment obligations.

According to a recent study released by the US Bipartisan Policy Research Center, the federal government has reached a debt ceiling of US$28.9 trillion at the end of October. Since then, the US Treasury Department has adopted unconventional measures to avoid debt defaults. The agency previously predicted that if the US Congress does not pass new legislation to raise the debt ceiling or suspend its effectiveness, the federal government may default on debt in mid-December.

Although the two parties often reach agreements before deadlines, the fact that they face debt defaults every few years reflects the serious drawbacks of the U.S. political polarization, the difficulty of finding social consensus, the failure of the governance system, and the political credit overdraft.This has not only become aChangheAn important source of risk for capital market volatility, its spillover effects have also spread to the world through U.S. bonds, U.S. dollars and financial markets, threatening the recovery of the world economy and the stability of the global financial market.

See also  The timing is too short for the maneuver, the EU fears the provisional exercise

(Source: Yangcheng Evening News)

.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy