While the debt limit was suspended last year by Congress, allowing them to borrow as much as they wanted to finance projects, it has now been brought back into effect starting this past Monday. Late last week Treasury Secretary, Jacob Lew, suspended Treasury securities and decided to stop making investments in a pension fund for government employees.
The debt has finally caught up with the GDP which, to policy makers, is not a good sign. While Lew urges Congress to raise the ceiling based on the newly enforced cap there is talk that the federal government will be able to last until October or November through various “extraordinary” measures. Though what constitutes these extraordinary measures? The measures are explained more here. Part of the measures, before Congress is able to pass any sort of debt ceiling, include suspending new investments in the Civil Service Retirement and Disability Fund.
Previously the debt limit has caused major problems on the United State’s political scene, first in August 2011 when we saw a downgrade of the nation’s credit ratings, the first ever seen by the United States. Then in October 2013 we all remember the government shutdown caused, partly, by the disagreements about the national debt. Some believe that now again, will be a time partisan issues will come to the forefront but Senate Majority Leader Mitch McConnell assured the public that this would not happen.
What do you think, should we be concerned with the national debt?