By JLP | July 26, 2011
The analysis estimates that without authorization to borrow, the federal government would take in about $203 billion in revenue but have $362 billion in bills to pay.
Politics aside, read this: How a U.S. Default Could Affect You
According to the article, not raising the debt ceiling could “be big trouble for anyone who needs a car, needs a home or student loan, uses a credit card, has a retirement savings account or wants to travel abroad.”
What would happen if the ceiling wasn’t raised?
“”…choices would have to be made on what got paid. Interest on outstanding debt would take priority to avoid default and damage to the U.S. credit rating. Beyond that, should the government pay Social Security benefits but not the salaries of servicemen and servicewomen on active duty? Medicare and Medicaid payments but not federal workers’ salaries and benefits?”
I’m torn on this issue. I can see the short-term need to raise the ceiling but I also look at it from a personal finance point of view in that you don’t get out of debt by going into more debt.