If you could assign the US a credit score, what would it be?
The House of Representatives passed a resolution suspending the United States’ debt ceiling on Wednesday as the country approaches its first-ever default. The Republican Party has opposed attempts to increase the debt ceiling, so the plan will likely be blocked in the Senate.
Treasury Secretary Janet Yellen has warned Congress that the United States would run out of options for paying its obligations around October 18. If Congress fails to suspend or increase the debt ceiling before the deadline, millions of jobs could be lost, government programs could be jeopardized, and financial markets could plunge.
This week, Congress hopes to avert two catastrophes. First, there’s the deadline of midnight Thursday to approve a budget bill before the government shuts down. The Senate may vote Thursday on a short-term funding bill that would fund the government through early December. The bill would then be sent to the House of Representatives for consideration, where it is likely to pass.
Then there’s the unresolved debt ceiling issue. If the US does not raise or suspend the limit, it will be unable to meet its debt obligations. This wouldn’t be the first time the US has changed the debt ceiling though. According to the Treasury Department, Congress has increased or suspended the debt ceiling 78 times since 1960.
Do you think the US government will put their political differences aside and prevent the most important economy in the world from default?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.