The government shutdown is already causing severe hardship across the country, but we are quickly approaching an even larger crisis: breaching the federal debt limit. Experts at the U.S. Department of the Treasury warn that if Congress fails to raise the debt limit soon, the result could be an economic catastrophe “of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression.”
A new CAP column answers the five most important questions for understanding the debt limit crisis:
- What is the debt limit?
- What happens if we don’t raise the debt limit?
- Does raising the debt limit authorize new spending?
- Is there an alternative to raising the debt limit?
- Who is responsible for raising the debt limit?
For more on this topic, please see:
- Debt Limit 101 by Harry Stein