The U.S. just hit its debt limit<\/a>, following Congress\u2019s failure to reach a deal to raise the debt ceiling<\/a>. While the Treasury Department announced it would start implementing its \u201cextraordinary measures<\/a>\u201d \u2014 including suspending retirement and health benefit funds \u2014 which will in essence just buy time, but not resolve the issue.<\/p>\n Debt Ceiling 2023: How Federal Deficit and National Debt Differ<\/a> To put this in context, the debt limit was raised to approximately $31.381 trillion on Dec. 16, 2021,\u00a0but a Republican-led Congress following the midterm elections is now looking for spending cuts in exchange for support in raising the debt ceiling, something most\u00a0Democrats argue against.<\/p>\n Meanwhile, consumer credit card debt is also at an all-time high. The average debt of Americans with unpaid credit card balances is $6,569 and Americans\u2019 total credit debt is up to $887 billion, a 13% increase from the second quarter of 2021 \u2014 the largest year-over-year jump in 20 years, according to a recent Spinwheel survey.<\/p>\n \u201cWithout enough money to pay its bills, any of the payments are at risk, including all government spending, mandatory payments, interest on our debt, and payments to U.S. bondholders. While a government shutdown would be disruptive, a government default could be disastrous,\u201d the CFRB noted.<\/p>\n \u201cIn the simplest terms, the federal debt ceiling is a lot like your credit card bill. The debt ceiling is your balance \u2014 both you and the federal government have already charged a bunch of expenses. Now it\u2019s time to pay. You write a check, but the federal government needs the House of Representatives to take formal action,\u201d said Howard Dvorkin, Howard Dvorkin, CPA and Chairman of Debt.com.<\/p>\n Dvorkin added that Congress is grappling with two separate issues here: The United States can\u2019t keep spending more than it earns, because eventually, that catches up with both you and the country.<\/p>\n
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