The U.S. National Debt is almost $33 trillion, a new record high. This is the concern of economists and decision-makers. They worry that if the government is unable to make its payments, the economy could suffer greatly.
Understanding the U.S. National Debt : Causes, Consequences, and the Looming Risk of a Government Shutdown
The entire sum of money that the federal government owes its creditors is known as the U.S. National Debt. It has been steadily expanding in recent years for a variety of reasons. Tax reductions, increased funding for entitlement programmes, and the wars in Iraq and Afghanistan are just a few examples.
The debt is currently so high that it is about equal to 120% of the US GDP. This level of debt is risky. Because it indicates that the government spends more money than it receives in tax revenue.
A government shutdown can occur if the government is unable to pay its bills. Numerous government services would be suspended as a result. And it can be detrimental to the economy.
Numerous actions could be taken to address the issue of the national debt. Also tax increases would be one possibility. Spending less would be an additional choice. Both of these solutions, though, are challenging politically.
The Consequences of Delaying Solutions to the National Debt and the Impending Government Shutdown Risk
Beginning to handle the issue of national debt right away is the wisest course of action. Also the issue will worsen the longer the government waits.
The following are some possible effects of a government shutdown:
- Furloughed employees are those who work for the government but are not paid for it.
- Governmental operations would stop. Like the Department of Defence, Social Security, and the IRS.
- The economy can suffer as a result of firms losing clients and employees losing money.
- A fall in the government’s credit rating could increase the cost of borrowing money.
The US economy would be severely disrupted by a government shutdown. Also it is crucial to take action to prevent a shutdown. like passing a budget and lifting the debt ceiling.
