The Debt Ceiling Battle: What Happens When the United States Government Expends All of Its Money

Imagine maxing out your credit card and refusing to agree to raise the limit—even when you need to buy groceries, pay rent, and turn on the lights. That is essentially what our government goes through when Congress grapples over raising the debt limit. It is not just an issue of the budget—it’s a battle of politics of global proportions.

Today, that conflict is once more present.

Earlier in the month, America once more hit its limit of how much it could borrow. The clock is ticking towards default and Congress is fighting out a high-stakes battle: Should the limit be raised unconditionally, or should expenses be trimmed in advance? The battle lines are familiar but stakes are greater than ever before.

Image: Jim Watson/AFP/Getty Images

Unless Congress takes action, America would default on its debt—that is, fail to pay back money it had borrowed. Economists say that would shock world markets, drive the dollar into crisis, and threaten a recession. Social Security checks could not be mailed out. Federal employees could not be paid. Interest rates would skyrocket.

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And all of them are avoidable.

It’s not numbers—that’s politics. There are people who are using the debt ceiling to push agendas like slashing healthcare investment or reversing clean energy investment. Others maintain default is not an option and that America has to pay its bills—and that’s it.

Congress has routinely raised the deadline before, but with increasing polarization, what once was routine is now a high-stakes game of chicken.

It is an issue youth need to take an interest in—not just because it affects the economy now, but additionally since it creates a precedent. If such brinkmanship continues to be permitted, it can potentially erode trust in government, lower credit ratings, and make it hard to invest in the future.

The United States cannot afford to default. We don’t have an ability to play with our economy like a pawn for a political purpose. The debt ceiling crisis reminds us that gridlock is not just ugly, but expensive.