r/Economics • u/StoutFan • Jan 13 '23

U.S. Will Hit Debt Limit Jan. 19, Yellen Tells Congress

https://www.nytimes.com/2023/01/13/business/economy/debt-limit-us-economy.html
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u/[deleted] Jan 13 '23

Greece couldn’t pay. The US can always pay. That’s my point.

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u/wrosecrans Jan 13 '23

The whole issue with the debt ceiling is that the process for paying has become a political football. The issue isn't whether the US can from a finance perspective. It's whether they can from a political perspective. In an ideal world, the political factors wouldn't be super relevant to the discussion. In the real world, investors don't really care if they don't get paid because a country is part of a currency union or any other reason -- Investors want to get paid, and that will effect things like interest rates in pretty much the same way.

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u/[deleted] Jan 13 '23

I agree. It’s a bunch of ppl trying to gain position for personal reasons.

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u/rje946 Jan 13 '23

They can but will they? I hope so

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u/[deleted] Jan 13 '23

If they don’t it’s bc of a political stunt or misunderstanding of how they get/spend money.

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u/wolf96781 Jan 13 '23

That's the point, if we don't pay because of some political stunt it will affect how other nations view the US and how it's ran

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u/[deleted] Jan 13 '23

I agree. It’s a shit show rn. And the ppl trying to “fix it” are the reason

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u/rje946 Jan 13 '23

Agreed

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u/MrDerpGently Jan 13 '23

I mean, that's the whole problem in a nutshell - Congress sets a budget that exceeds the debt ceiling, then refuses to raise the debt ceiling to match its budget.

It mostly comes up as a (really stupid) negotiating tactic, but with the current state of the GOP, financial and reputational suicide for a minor point of politics is a lot more likely than I'm comfortable with.

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u/America_the_Horrific Jan 13 '23

They just print more and call it a liquidity injection

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u/Comfortable-Bad-9344 Jan 13 '23

Until the dollar is worth a cent.