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US hits debt ceiling, threatening economic outlook
Laffer: Going too far on debt ceiling will have huge negative consequences on economy
Former Reagan Economic Adviser Art Laffer arguing debt ceiling debate is ‘primarily theatrics.’
The U.S. hit its debt limit on Thursday, forcing the Treasury Department to begin deploying a series of emergency moves so that the government can continue to pay its bills.
In a letter to Congress, Treasury Secretary Janet Yellen said the department will start using so-called "extraordinary measures" to prevent the U.S. from defaulting on its obligation.
"The period of time that extraordinary measures may last is subject to considerable uncertainty, including the challenges of forecasting the payments and receipts of the U.S. Government months into the future," Yellen wrote. "I respectfully urge Congress to act promptly to protect the full faith and credit of the United States."
The debt ceiling, which is currently around $31.4 trillion, is the legal limit on the total amount of debt that the federal government can borrow on behalf of the public, including Social Security and Medicare benefits, military salaries and tax refunds.
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