US about to hit the debt ceiling. No plan yet to avoid default

January 13, 2023

T-minus six days.

That’s when the Treasury Secretary says the United States would reach the federal debt limit.  The debt limit is the amount of money the federal government is allowed to borrow to pay its bills.

And it’s reeeeeeeeally important for you to understand — raising or suspending the debt ceiling does *not* authorize any new spending. Raising of suspending the debt ceiling *only* pays the bills congress has racked up over years.

Secretary Janet Yellen wrote this letter to Congress today warning lawmakers that starting on January 19^th she will have to start using what are called ‘extraordinary measures” basically accounting gimmicks to keep the US government from defaulting on our debt. She says she can keep those gimmicks up and keep the government afloat with the cash on hand until about June but after that if congress does nothing, the United States would default on its debt for the first time in history.

The bottom line is congress has to do something. They need to either raise or suspend the debt ceiling in order to stop a catastrophic debt default.  This is going to be a major fight on Capitol Hill.

Read the letter from Secretary Yellen here.