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Debt ceiling - Essay Example

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Debt ceiling

The researcher states that debt ceiling is the limit to which debts can be borrowed. The debt ceiling as perceived in the United States is the maximum amount of debt that can be borrowed by the United States in order to run its operations. The process through which debt is borrowed by the government is by issuing bonds. The government issues bonds in order to raise the debt and the holders of such bonds hold the position of a creditor. The bonds have a date of maturity and a rate of return, and these are held by individuals or organizations as available for sale as well. Due to the application of debt ceiling, there is a limit to the amount borrowed by the United States through such bonds, which means the overall deficit in the federal budget cannot exceed the debt ceiling therefore it can be said the overall spending of the government is limited to the extent of the debt ceiling. The topic of debt ceiling was selected because it holds significant importance in the current economic situation of the United States. After the recent debt ceiling crisis and the impacts of this crisis on the overall economy of the United States, the understanding of the concept of debt ceiling holds significant importance. Before the debt ceiling was created in the United States, the President was free to make decisions regarding the overall borrowings by the US. The debt ceiling was created in 1917 in order to ensure the accountability of the debt borrowings by the US. Debt ceiling is important for the economy of the US in a number of ways. Following are some of the important aspects of the debt ceiling. ...Show more

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The researcher of this following paper would consider the importance of debt ceiling in the economy of the United States, the impact of debt ceiling on the economy of the United States and whether the application of debt ceiling is necessary…
Author : ashlynn19
Debt ceiling essay example
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