US “debt ceiling”: temporary agreement postpones the crisis to December
One of the most traumatic events of the US economic policy is the failure to update the debt ceiling. To be brief, the US debt in the US cannot vary only with the simple budget law, but there is a limit to the value of the federal debt which must be at least 60 senators, so it must also involve a slice of the opposition. If the limit is not raised then automatically the government must cut expenses because it cannot, objectively, exceed this ceiling and in the past all non-essential services have been closed, putting employees on unpaid leave.
Time was too short for a real deal so the Senate reached a mini-deal: Media reports indicate that Senate leaders have reached an agreement to raise the debt ceiling by $ 480 billion (i.e. to $ 28.8 trillion). ) . This is intended to bring the Treasury to December 3, at which point a further increase or suspension of the debt limit would be required. The amount is higher than we would have expected the Treasury would need to reach that date, so there seems to be a good chance that the actual deadline for the next hike will come a little later than December 3rd. That said, it's probably not enough to last beyond the end of the year, so it seems likely that Congress will have to address this in December as planned, as part of the next budget bill.
So the problem is far from solved, but you just kicked the jar again and shipped it later. If they do not come to an agreement, we may even find ourselves faced with a "Default" of the debt, to be understood as a postponement of the payment of interest at the time of the agreement. The closedown of the federal machine would be a blow to all US politics, but we do not believe that the radicalization of the confrontation does not go that far.
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The article "Debt ceiling" USA: temporary agreement postpones the crisis to December comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/tetto-del-debito-usa-accordo-temporaneo-rinvia-la-crisi-a-dicembre/ on Fri, 08 Oct 2021 14:18:53 +0000.