Leaders.com
  • Login
  • Subscribe
  • Business
  • Leadership
  • Wealth
  • Master Classes
  • Business
    • Entrepreneurs
    • Executives
    • Marketing and Sales
    • Social Media
    • Innovation
    • Women in Business
  • Leadership
    • Personal Growth
    • Company Culture
    • Public Speaking
    • Productivity
    • Hiring
    • Social Issues
    • Leaders
  • Wealth
    • Investing
    • Cryptocurrency
    • Retirement
    • Venture Capital
    • Loans and Borrowing
    • Taxes
    • Markets
    • Real Estate
  • Master Classes
  • Login
  • Subscribe
Loans and Borrowing the debt ceiling

Treasury Secretary Janet Yellen is asking Congress for an extension on the debt ceiling. (NICHOLAS KAMM/AFP via Getty Images)

By Hannah Bryan Leaders Staff

Hannah Bryan

Hannah Bryan

News Writer

Hannah Bryan is a news writer for Leaders Media. Most recently she was a reporter for the Sanilac County News...

Full bio


Learn about our editorial policy

Dec 5, 2022

Breaking Down the Debt Ceiling

As the federal government inches closer to reaching the debt ceiling, talks are renewed on whether or not to raise it.

Key Details

  • Somewhat counterintuitive to the name, the debt ceiling is a method that allows the federal government to more easily borrow money.
  • Since its creation in 1917, the debt ceiling has become a political hot-button topic with the potential to create economic upheaval.
  • A refusal to raise the debt ceiling could potentially result in the federal government defaulting on some of its responsibilities. 
  • As the government reaches the limit of the debt ceiling, debate is renewed surrounding whether or not to raise it and by how much. 

Why it’s news

With current spending, the federal government will likely exceed the current debt limit of $31.4 trillion by next year. Treasury Secretary Janet Yellen has begun asking Congress to push the limit beyond November 2024 in order to prevent chaos during the presidential election. 

If Congress follows Yellen’s suggestion, Yellen will be able to delay a potential default for a few months while the new president is elected. She will be able to accomplish this by delaying payments to certain programs such as federal employee retirement funds and redirect those payments to the national debt. 

Once that method is drained, a partial government shutdown may be on the table.

Party leaders on both sides are planning to support raising the debt limit, however the parties are split on how to do so. Republicans are looking to include spending cuts alongside the debt ceiling hike. These spending cuts would potentially include programs such as Social Security, Medicare, and Medicaid. Democrats have expressed strong opposition to this proposal.

Congress could potentially attempt to raise the debt ceiling before the end of the year before newly elected officials come into office. However, House Speaker Nancy Pelosi has not indicated much interest in taking this route. 

Backing up a bit

The debt ceiling was initially a tool introduced in 1917 that made it simpler for the U.S. to gain funding during World War I. As World War II began to take shape in 1939, Congress established the first aggregate debt limit. “Raising the ceiling lets the government borrow to cover the gap between spending and taxes already approved by Congress,” Bloomberg’s Steven T. Dennis explains.

Raising the debt limit was not always a political issue. The routine procedure became a hotly debated issue in 1953 when President Dwight Eisenhower requested an increase in order to further fund his national highway system. Since then, raising the ceiling has had the potential to be a contentious issue, though it is often raised without much fight. 

The most significant disagreements resulted in temporary government shutdowns in 1995 and 1996. In 2011, Congress once again struggled to raise the limit and the U.S. government’s credit rating declined for the first time. The debt ceiling was actually suspended for the first time in 2013 after parties could not come to an agreement.

Home / News / Breaking Down the Debt Ceiling
Share
FacebookTweetEmailLinkedIn

Related Stories

Dealing With the High Cost Of Eggs

by Hannah Bryan Leaders Staff
Business

Jan 27, 2023

High egg prices are driving consumers to search for potential egg replacements—including plant-based alternatives. 

Key Details

  • The price of eggs has nearly tripled since the pandemic, driven by inflationary prices and shortages caused by an avian flu outbreak. 
  • Eggs are traditionally a cheap, reliable source of protein. Their recent inaccessibility poses a problem for consumers. 
  • Consumers are turning to egg replacements and alternatives, including freeze-dried eggs and plant-based alternatives. 
  • Plant-based egg replacements are traditionally more expensive than eggs, but the price surge has changed that. 

Go deeper

FacebookTweetEmailLinkedIn

The Shows That Streamed the Most

by Savannah Young Leaders Staff
Entertainment

Jan 27, 2023

Stranger Things on Netflix is the most-watched streaming show of 2022, but Paramount+ has content that is catching up.

Key Details

  • Netflix’s Stranger Things was the most-streamed show in the U.S., with more than 52 billion minutes of viewing time over the year, according to the Hollywood Reporter.
  • That made the original series land the biggest number since The Office claimed 57.1 billion minutes of viewing during the lockdown in 2020.
  • Stranger Things had a 36% higher watch rate than the second most watched show, NCIS, only having 38.1 billion.
  • Paramount+ is moving up the ranks to compete with Netflix—Paramount+ is the second most shows with the most streams, according to The Wrap.

Go deeper

FacebookTweetEmailLinkedIn

Panasonic Doing What It Does Best

by Savannah Young Leaders Staff
Business

Jan 27, 2023

Battery maker Panasonic is optimistic that the U.S. could build another battery plant to advance toward higher electric vehicle (EV) production.

Key Details

  • In November, Panasonic broke ground on a new $4 billion factory in DeSoto, Kansas, that will create batteries for multiple customers.
  • The factory adds another 60% to Panasonic’s global battery capacity.
  • As EV growth continues, the need for battery production ramps up as well, and the president of Panasonic Energy North America, Allan Swan, is optimistic that the U.S. could build another EV battery factory.

Go deeper

FacebookTweetEmailLinkedIn
Despite economists’ recessionary outlooks, American Express CEO Stephen Squeri (left) doesn’t see a significant downturn coming soon
Business

Jan 27, 2023

Amex Chief Offers Different View Of Recession

by Savannah Young Leaders Staff
SBF family may testify
Cryptocurrency

Jan 27, 2023

The FTX Family Affair Collapse

by Hannah Bryan Leaders Staff
stock market
Markets

Jan 27, 2023

Comeback Rally Marches On

by Hannah Bryan Leaders Staff

Recent Articles

Wealth

Jan 27, 2023

How to Start Flipping Houses + 4 Mistakes That Could Bankrupt You

Learn how to start flipping houses to make a profit

Personal Growth

Jan 27, 2023

Top 10 Powerful Habits of Successful People for 2023

Try these habits for more life and career success

Business

Jan 26, 2023

How to Prepare for an Interview: 14 Tips to Get the Job

Ace your interview with these tips

  • Business
  • Leadership
  • Wealth
Join the Leaders Community

Get exclusive tools and resources you need to grow as a leader and scale a purpose-driven business.

Subscribing indicates your consent to our Terms & Conditions and Privacy Policy

Leaders.com
  • Privacy Policy
  • About
  • Careers
  • Cookie Policy
  • Terms
  • Disclosures
  • Editorial Policy
  • Member Login

© 2023 Leaders.com - All rights reserved.

Search Leaders.com