Clock Ticking On US Debt Ceiling
This week Uncle Sam plans to sell $123 billion worth of Treasurys. That will bring the country’s debt level very close to the $12.1 trillion debt ceiling.
NEW YORK (CNNMoney.com) — Roughly $211 billion separates what the country owes and its self-imposed credit limit.
And by Friday, after another week of massive debt sales by the Treasury Department, that gap will likely have narrowed considerably.
It is now expected that the $12.104 trillion debt ceiling could be breached by the end of November.
It is also expected that lawmakers will raise the ceiling, as they have done more than 90 times since 1940 — eight of them since 2002.
If they don’t, the government could be forced to shut down. But that’s not the worst that could happen. In fact, the government did shut down for a spell in 1995 and life went on. The reason lawmakers will eventually approve an increase is because without one ultimately the value of U.S. bonds would sink, jeopardizing the portfolios of countries and investors around the world who invest in U.S. debt.
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