If the debt ceiling is basically available credit, does the government need to pay this before requesting more credit? Why or why not?
Please no political answers.
In: 0
Oh dear god no!
The debt ceiling is largely a political football. There was a time when it was getting paid down, but since around 1970 the national debt has been rising, and rising faster.
The US is an example of “too big to fail” most other nations depend on us for their economies. For example, China and Japan hold a ton of our debt, but we import a massive amount of goods from them. The EU is somewhat dependent on the US military.
If the US defaulted in its debts it would be global economic chaos. So we just keep borrowing.
TLDR; at a certain point large amounts of debt are theoretical, they exist on paper but it’s impossible to collect.
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