What Happens if the Debt Ceiling is Not Raised?

The U.S. Treasury defines the debt ceiling or limit as “the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.” The current debt ceiling is set at $16.7 trillion. Increasing it is necessary to allow the government to continue to meet its existing financial obligations–it does not give the government free reign to increase spending.

The Republican opposition to setting the new debt limit has already led to a government shutdown, the 18^th in the nation’s history. The shutdown that began Oct. 1 has had numerous repercussions: national park systems are closed, government data reports are not getting compiled or published, certain licensing for imports and exports is delayed, federal employees are not getting paid, the International Trade Commission is not reviewing trade infringement cases … the list goes on and on. Uncertainty makes the stock market unsteady and GDP falls .15 percent every week the shutdown continues according to Morgan Stanley.