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Isabella Patterson

Professor Kennedy

AMH 1020

27 May 2023

The Debt Ceiling

The debt ceiling is a critical aspect of the United States financial system. It serves as a

limit on the amount of money the federal government can borrow. As well as sets a cap on the

national debt, beyond which the government must seek congressional approval to increase

borrowing. The debt ceiling has been raised numerous times, but it remains controversial among

politicians and economists. Some argue that raising the debt ceiling is necessary to prevent a

government shutdown or default on its obligations, while others believe it is a sign of

irresponsible spending and should be avoided at all costs. Regardless of one's stance on the issue,

the debt ceiling will continue to play a significant role in shaping the country's economic policies

and financial stability. This essay will explore the significance of the debt ceiling and emphasize

the importance of the United States fulfilling its financial responsibilities.

To begin, the debt ceiling was created in 1917 by Congress. It is a statutory limit that

restricts the amount of money the U.S. government can borrow to finance its operations and

fulfill its financial obligations. When the government reaches the debt ceiling, it cannot issue

new debt or borrow funds to meet its spending commitments. It acts as a control mechanism,

ensuring that the government does not accumulate excessive debt without legislative oversight.
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Throughout history, this limit has continued to rise to support the endeavors of the country. Once

the debt hits the limit set by Congress, the government cannot borrow any more money. This

means that any loans the U.S. has taken out in other countries will default, and our credit rating

could drop. This would negatively affect our economy.

Maintaining a strong and stable economy is crucial for any nation's well-being. To uphold

its economic stability and inspire confidence among investors, the U.S. has to take care of its

financial responsibilities. Meeting debt obligations preserves the nation's creditworthiness and

allows the government to borrow money at favorable interest rates, spur investment, and promote

economic growth.

Moreover, the United States holds a prominent position in the global financial system. Its

ability to honor its financial commitments impacts international markets and investor confidence

worldwide. By upholding its financial responsibilities, the U.S. government reinforces its

reputation as a reliable borrower, bolstering trust in the U.S. dollar as the global reserve currency.

This trust facilitates international trade, investments, and the stability of financial markets, all of

which contribute to global economic prosperity. Failure to address the debt ceiling would lead to

severe fiscal constraints, requiring spending cuts or even a potential default. This, in turn, would

negatively impact various sectors, such as healthcare, education, infrastructure, and defense,

hampering the government's ability to address the needs of its citizens.

Furthermore, fulfilling financial responsibilities is crucial for ensuring intergenerational

equity. The debt incurred today must be repaid by future generations. By responsibly managing

the debt, the United States prevents the burden from falling disproportionately on future
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taxpayers. This promotes fairness and sustainability, allowing future generations to have the

freedom to invest in their priorities and economic growth.

In conclusion, the debt ceiling serves as a vital mechanism for maintaining the financial

stability of the United States. It ensures responsible fiscal management, economic stability, and

global trust. By fulfilling its financial responsibilities, the government enables the provision of

crucial social programs, maintains its reputation as a reliable borrower, and promotes

inter-generational equity. Recognizing the importance of the debt ceiling and addressing it

prudently is essential for the United States to sustain its economic well-being and secure a

prosperous future for its citizens.