Former President Donald Trump has dismissed the national debt ceiling as a meaningless concept, raising concerns about the incoming administration's ability to navigate potential fiscal crises. With the debt ceiling reinstatement looming on January 1, 2025, and the possibility of a government shutdown, Trump's comments highlight the complex financial challenges that the next administration could face.
Congress last raised the debt ceiling in June 2023, after the U.S. hit the ceiling on Jan. 18 of that year. The lengthy fight did not end in a default on the national debt, but instead that vote to raise and suspend the ceiling through Jan. 1, 2025.
Most of the time, the government doesn't have enough revenue on hand to pay for everything in those spending bills — such as infrastructure, social security, Medicare and defense. That's been the case since at least 2001, which was the last time, like bonds. The bond buyer gives the Treasury cash to pay the deficit, and in exchange the Treasury eventually pays the buyer back that money plus interest.
On May 26, Yellen once again revised her estimate based on the most recent available data, and set the deadline back to June 5. Economists say consequences of a default on the national debt could include higher interest rates, a stock market crash, a recession and massive job losses. NBC's Alice Barr reports." in my opinion unthinkable to have the U.S. say 'We can't pay off our debt,'" Valliere said.
Higher interest rates due to downgraded U.S. credit would make it even harder for the Treasury to pay back the interest on future debt. "What's different this time I think is that you have an awful lot of very hardcore Republicans in the House, as we saw a couple of weeks ago," Valliere said last January, referring to the 15 votes that took place before
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