The American government has seen its fair share of highs and lows in its spending and how it assists businesses throughout the country. We’ve seen the most extraordinary highs in the roaring 20s to our lowest lows in the Great Depression. Yet through it all, we have to deal with our debts even once. With that said, the inception of this pandemic with increasingly high inflation rates has made matters more complicated as of late. What is also complicating matters is political disputes are making America’s financial future shakier as of late.
The Debt Limit
Unknown towards many Americans is the fact that there is a debt limit in America, limiting how much money the country can borrow at a given time. The limit also determines just how much debt the country can take on at once. While this measure can be necessary, it legally ties up the government’s hands once the limit is reached, significantly shortening its options to assist businesses and other sectors. Unless the government raises or suspends the debt limit, defaulting on the debt seems more likely as the days progress.
Naturally, it’s the country’s power to correct this issue as soon as possible, leading the house of representatives to pass a debt limit suspension that would buy the country’s valuable time to figure out a more long-term solution. Unfortunately for the largely Democratic-run house, the bill was killed by the Republican-run Senate, which has created a tense standoff between both parties with an October 15th deadline coming around the corner, which some predict will be the day the U.S. runs out of money.
The Republicans don’t like the idea of the debt suspension since it could give Democrats an excuse to spend even more money, which could raise the national debt and put the country in an even deeper hole. This situation makes matters complicated for Democrats that were behind Biden’s expensive infrastructure plan and other prominent budgeted legislation that they feel need to be passed in the future.
If the government is unable to agree on how to proceed regarding the nation’s debt, it isn’t just business that relies on the government’s spending that will be affected. It will also be those who are reliant on food stamps and a collapse of pensions, along with compensation for single mothers and veterans. It could turn into a downward spiral of American society as a whole.
The most likely conclusion to this hiccup is that it will still be resolved. It is still quite worrying that matters such as these are becoming so hotly contested, and the national debt is growing even higher. And it most definitely should be concerning with said debt being as high as 28 trillion and counting.