Most Americans know what it’s like to be in debt, but when it comes to the country’s debt ceiling, a lot of people appear confused as to what the debt ceiling is and why it has to be raised.
America’s debt is rising so fast that we are currently looking at our debt ceiling cracking. While there is no actual ceiling, these cracks are very real and a danger to the stability of our nation.
The debt ceiling is a cap on the amount of debt the federal government can legally borrow set by Congress. Imagine if you stopped paying your credit cards bills or your car payments; you would ruin your credit rating and your car would be repossessed. The same thing happens with countries that default on their debt. Put simply, if Congress does not raise the debt ceiling then China, Japan, OPEC, and others will stop giving us low-interest loans. Foreigners will pull money out of the U.S. and the dollar will drop. In the end, this means that our cost of living will rise substantially.