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Debt Ceiling

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Discuss the cause and effect of raising the debt ceiling.

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This posting discusses the cause and effect of the debt ceiling.

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The debt ceiling in the United States is an interesting topic. As of now, the Federal Government can only spend as much money as the Congress approves. If they go over this amount of money, there is a budget deficit. The only way that they can pay the deficit is to borrow the money that they need from the Department of the Treasury. However, they have a credit limit as to the amount of money that they can borrow. This is called the debt ceiling. If they need more, then they need an approval to get it.

If they hit the limit and still need money to use, then the ceiling needs to be raised. This is very similar to a credit limit on a Visa or a MasterCard. Sometimes a person needs a raise in their credit limit in order to afford something. The bank, therefore, considers the person and decides to approve it or not. Congress is no exception. Right now, ...

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