What is the debt ceiling?

As America's government hits the debt ceiling, US politics has become a multi-trillion dollar game of chicken. If neither side backs down, America could default on its debts for the first time in history, sparking global economic turmoil. What is the debt ceiling, and how can this crisis be resolved?

[tonysilke]

The U.S. economy relies on ongoing credit and debt generation for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. Meanwhile, foreign nations continue to desire the U.S. dollar, despite their own economies facing significant challenges, some even worse than that of the U.S. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.

[theTeslaking]

The U.S. economy is sustained by continuous credit and debt creation. It is anticipated that the Federal Reserve will expand the money supply, which will cause the typical American to accrue more debt. much though many other countries' economies are struggling—some much more so than the US economy—they yet have a strong thirst for US dollars. Concerns are raised regarding who will eventually be affected by these economic forces in this situation.

[dianarabbanii]

Retiring in 20 years? Due to inflation, you may need upwards of $2.6 million to maintain your existing lifestyle, with the ongoing effects of high inflation, lower forecasted stock market returns, and stagnant wages, achieving a secure early retirement could be more challenging than ever before

[leondonald]

It is a government inspired crisis this time. The Treasury have to sell Bonds to cover the trade imbalance and the government spending imbalance. In order to sell them they have to raise interest rates and the old long-term, low risk, low interest, AAA investments (including Treasury Bonds), held by the banks (often due to government regulatory policy), become next to worthless. The next milestone is the 15th when the government issue a new batch of Bonds. I have approximately 350k stagnant in my portfolio that needs growth. What is the best way to take advantage of this downturn?

[nicholasharvey]

The debt ceiling is essentially meaningless at this point, it gets raised every single time we approach it, without fail. Why even bother having a debt limit if you're just going to keep moving it before you reach it.

[gingerkilkus]

Economists and business leaders are voicing concerns at the start of 2023 that the year could be a difficult one. JPMorgan Chase & Co. Chief Executive Jamie Dimon said that the Federal Reserve may need to raise interest rates to 6% to fight inflation, higher than the peak level between 5% and 5.5% in 2023 that most Fed officials penciled in after their December meeting. Although I read an article of people that grossed profits up to $500k during this crash, what are the best stocks to buy/short now or put on a watchlist.

[anthonyg]

They'll raise it. They've raised it 100 times before. The big problem will be when the dollar ceases to exist as a viable currency.

[MalindaDeleon]

I’m glad I pulled through, despite the crises. I am retiring next yr at 55 with 3 houses paid off worth 4.5 million . One is my place of residence the other 2 properties will give me $80, 000per/yr rent . I will have an income stream of $20, 000 per yr through my super which gives me total $100, 000 a yr to live comfortably . I have no debts ... Stay Motivated!!!

[Raymondjohn]

Protecting your capital is much more important than making money. Basically because if you lose your capital, making money is much harder. ''Missing the train'' vs. ''losing your money''. There are a lot of trains, but if your money is gone, it's over.

[dempsey]

Let’s raise the debt ceiling to infinity billion dollars

[bobbymainz]

The negative impact of SVB and SI debacles has been reflected in the regional bank ETF (KRE) which has witnessed a decline of over 20%. This event has triggered contagion effects, dragging the entire market lower. However, historically speaking, a localized and narrow contagion of this nature presents an opportune time to invest in strong, financially stable companies with substantial cash reserves on their balance sheets.

[kaylawood]

All signs point to 2023 being a year of significant economic hardship for the entire nation. Put your cash to use straight away to increase its value. I was aware that I needed to invest. I had no idea how quickly a few thousand dollars a month would go up. Though it is. Since 2020, I've made about $600, 000.

[dranzacspartan]

Well it was bound to happen. USA is being totally irresponsible with their USD. Every country trades in USD. Every country clocks up debt to be repaid in USD. Except for USA.
USA gives countries a piece of paper that is supposed to allow them to buy equivalent trades exchanges anywhere around the World. But when it's time for USA to pay their debt, they just PRINT OFF MORE MONEY, which seriously dilutes the power of the USD for every other country in the world. As a result, USA does NOT pay their debt ... but indirectly ... every other country pays their debt.
USA gets commodities, raw materials, manufactured goods, global food, etc for virtually NOTHING ... they just give countries a piece of paper for their personal imports.
The other thing USA does, which is extremely MEAN, is that USD's are circulated by SWIFT. All Countries have their USD held in SWIFT, which keeps track of the Countries USD transactions. But, USA have the POWER to switch off any Country's SWIFT account so they can NOT do any trade exchanges ...even though its their OWN money.
Look at Afghanistan. USA decides they don't like their Government, so they've switched off Afghanistan from SWIFT so that Afghanistan can NOT get access to their own Trillion Dollars of USD ... forcing all the Afghan citizens to live in 3rd World Conditions because their Government can't build them Civic Infrastructures or Civic Services.
The value of the USD has lost more than 96% of its purchasing power since the creation of the Federal Reserve in 1913. Consumer prices have gone up more than 24 times since 1913, meaning that a $1 Billion from 1913 would have less than 4 cents in purchasing power today. This is the result of USA just printing off more USD’s to cover their debt (which they never pay off, they just print more USD’s). This would not happen with Gold.
For example, in 1978 an Oz gold was worth $35.00 and in 2023 an Oz gold is worth $2, 000.00, an INCREASE of 5700%. Similarly, from 1978 to 2023, the USD has a DEVALUATION of over 5500%.
As such, Countries need to off load their USD's ASAP and leave SWIFT. Hopefully the new BRICS World Community with fix the International Trading problem for them.

[Macvicky]

With everything happening now in the economy and the fact that inflation is still far higher than the Fed's 2% target, banks failing and more some individuals are getting richer and wealthy, the question is are you one of them or do you know the strategies ?

[atomiswave]

What worries me is that no video on YouTube actually talks of paying it off or getting it down. A country should use austerity measures and start suffering for their leaders actions if your in too much debt. Why should a person in debt on credit card pay their debts when the leaders keep raising the debt ceiling? It's a very bad role model.

[Riggsnic_co]

Nobody can become financially successful overnight. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking bold steps we need in other to reach our goals. you have to contend with inflation, recession, decisions from the Feds and all. I was able to increase my portfolio by $289k in months. You have to seek for help in the right places.

[sidakong]

They maybe can raise the debt ceiling If they see fit, but the rest of the world won't play their game anymore.

[fenseti]

it's not a ceiling if it always raised every 36 months

[Greggsberdard]

High prices for everything have severely affected my plan. I'm concerned if people who went through the 2008 financial crisis had an easier time than I am having now. The stock market is worrying me as my income has decreased, and I fear I won't have enough savings for retirement since I can't contribute as much as before.

[attsealevel]

We absolutely MUST CUT SPENDING. The US Govt is now almost 45% of the entire economy (it should be no more than about 23%). This is unsustainable. Just the interest this year alone could've paid for all public education in the country. Next year will be even worse. Intererest payments will crowd out all discretionary public spending in 10 years time. Then it's Game Over!