Post by hasan77 on Feb 15, 2024 0:43:06 GMT -5
The US has reached the debt ceiling and US Treasury Secretary Janet Yellen has warned that if it is not raised, the consequences could affect both the country and the rest of the world. We give you all the details you need to know. First of all, what is the debt ceiling? When we talk about the debt ceiling, what exactly do we mean? Well, specifically, it is a regulatory and legal limit that establishes the maximum amount of public debt that the United States Treasury can have; or what is the same, it is a restriction that limits the money that the federal government of the United States can allocate to the payment of the debt it has previously acquired.
This was established for the first time in 1917, with the objective of facilitating the indebtedness process of the US Treasury, but at the same time ensuring certain fiscal control and avoiding a growing and overflowing accumulation of the country's public debt. Specifically, the last limit established until now was 31.38 billion dollars , already exceeded on January 19, 2023. What can happen when the debt Papua New Guinea Email List ceiling is reached? When this happens and the country approaches its debt limit, one option is to raise it . This has already happened several times throughout history; In fact, since 1960 it has been done a total of 78 times . However, if this does not happen, the Treasury Secretariat can take certain extraordinary measures in order not to compromise state funds and to temporarily avoid reaching the debt ceiling.
For example, certain social programs may stop financing, such as retirement programs for civil servants, or investment in the purchase and sale of foreign currency may be suspended. What is the debt situation in the US? As we already told you, the United States reached its public debt ceiling at the beginning of 2023. Without a doubt, this is a more than delicate situation, and even more so considering that action had to be taken before June 1, 2023. In a scenario like This, in which a possible default on payments was becoming more and more feasible, all the alarms went off both nationally and internationally, and no wonder. If the United States defaults on payments, the world economy could be affected by a deep crisis, triggering “catastrophic consequences,” in the words of the United States Secretary of the Treasury, Janet Yellen. The reason is that the national Treasury bond market is one of the most liquid in the world. With all this on the table, it was more than necessary for the United States Government to take action and reach an agreement regarding the debt ceiling. Yellen declared that, if not, more than eight million salaries of civil servants could be suspended, in addition to military service, social security and retiree pensions, among other things.
This was established for the first time in 1917, with the objective of facilitating the indebtedness process of the US Treasury, but at the same time ensuring certain fiscal control and avoiding a growing and overflowing accumulation of the country's public debt. Specifically, the last limit established until now was 31.38 billion dollars , already exceeded on January 19, 2023. What can happen when the debt Papua New Guinea Email List ceiling is reached? When this happens and the country approaches its debt limit, one option is to raise it . This has already happened several times throughout history; In fact, since 1960 it has been done a total of 78 times . However, if this does not happen, the Treasury Secretariat can take certain extraordinary measures in order not to compromise state funds and to temporarily avoid reaching the debt ceiling.
For example, certain social programs may stop financing, such as retirement programs for civil servants, or investment in the purchase and sale of foreign currency may be suspended. What is the debt situation in the US? As we already told you, the United States reached its public debt ceiling at the beginning of 2023. Without a doubt, this is a more than delicate situation, and even more so considering that action had to be taken before June 1, 2023. In a scenario like This, in which a possible default on payments was becoming more and more feasible, all the alarms went off both nationally and internationally, and no wonder. If the United States defaults on payments, the world economy could be affected by a deep crisis, triggering “catastrophic consequences,” in the words of the United States Secretary of the Treasury, Janet Yellen. The reason is that the national Treasury bond market is one of the most liquid in the world. With all this on the table, it was more than necessary for the United States Government to take action and reach an agreement regarding the debt ceiling. Yellen declared that, if not, more than eight million salaries of civil servants could be suspended, in addition to military service, social security and retiree pensions, among other things.