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have you ever heard of the debt limit and wondered what it is? well, you're not alone. the debt limit is a complex topic that can be confusing, but don't worry, we're here to help you understand it. let's dive into the world of the debt limit, a financial weapon of mass destruction chained to the united states government by the united states government.
the debt limit: a brief overview
the debt limit is the maximum amount of money that the us government is allowed to borrow to pay for its expenses. it's like a credit card limit, but for the government. when the government needs to borrow more money than the debt limit allows, it must ask congress to raise the limit.
the president and congress: a financial dance
to understand the debt limit, you need to know the us splits financial responsibility between the president and congress. the president has two jobs when it comes to money: collect taxes and spend those taxes to run the government. this might give you the impression that the president, with regards to money, is all-powerful. but reality is just the opposite and the president is the one who takes orders. from whom? congress.
congress has the jobs of setting the tax level and determining how much the government will spend by writing a budget. so while the president does get to submit budgets to congress, and asks for changes in the tax level, these are just requests that congress doesn't have to pay attention to. congress can add or subtract anything they want from the president's budget or throw it out entirely and write a new one. the same goes for the level of taxes.
the debt limit: a unique american quirk
in most countries, if their legislatures approved more spending than they have income, they've also implicitly approved the necessary borrowing. but not in america. here congress also limits the total amount of debt the united states can have. this means that even if congress approves a budget with more spending than income, the president can't just borrow the necessary funds. instead, congress must raise the debt limit to allow the president to borrow the money.
the debt limit: a weapon of mass destruction
the debt limit is a financial weapon of mass destruction because it can cause serious damage to the us economy if not handled properly. if congress doesn't raise the debt limit and the government can't borrow more money, it will have to default on its debts. this can cause a financial crisis, as investors lose confidence in the us government's ability to pay its debts.
the debt limit: a political football
the debt limit has become a political football in recent years, with congress using it as a bargaining chip to get what they want. this has led to several debt ceiling crises, where the us government has come dangerously close to defaulting on its debts.
the debt limit: a call to action
the debt limit is a complex topic, but it's important to understand it. as a citizen, you have the power to hold your elected officials accountable and demand that they handle the debt limit responsibly. don't let the debt limit become a weapon of mass destruction.
further reading
- the debt limit explained blog
- the debt limit: a financial weapon of mass destruction
- the debt limit: a call to action
backlinks
putin's transformation of russia: a documentary analysis
financial literacy for kids: empowering the next generation
the hidden power structure of the united states
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